[Federal Register Volume 89, Number 208 (Monday, October 28, 2024)]
[Proposed Rules]
[Pages 85750-85795]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-24675]
[[Page 85749]]
Vol. 89
Monday,
No. 208
October 28, 2024
Part IV
Department of the Treasury
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Internal Revenue Service
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26 CFR Part 54
Department of Labor
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Employee Benefits Security Administration
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29 CFR Part 2590
Department of Health and Human Services
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45 CFR Part 147
Enhancing Coverage of Preventive Services Under the Affordable Care
Act; Proposed Rule
Federal Register / Vol. 89, No. 208 / Monday, October 28, 2024 /
Proposed Rules
[[Page 85750]]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
[REG-110878-24]
RIN 1545-BR35
DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Part 2590
RIN 1210-AC25
DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Part 147
[CMS 9887-P]
RIN 0938-AV57
Enhancing Coverage of Preventive Services Under the Affordable
Care Act
AGENCY: Internal Revenue Service, Department of the Treasury; Employee
Benefits Security Administration, Department of Labor; Centers for
Medicare & Medicaid Services, Department of Health and Human Services.
ACTION: Proposed rule.
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SUMMARY: This document sets forth proposed rules that would amend the
regulations regarding coverage of certain preventive services under the
Public Health Service Act. Specifically, this document proposes rules
that would provide that medical management techniques used by non-
grandfathered group health plans and health insurance issuers offering
non-grandfathered group or individual health insurance coverage with
respect to such preventive services would not be considered reasonable
unless the plan or issuer provides an easily accessible, transparent,
and sufficiently expedient exceptions process that would allow an
individual to receive coverage without cost sharing for the preventive
service that is medically necessary with respect to the individual, as
determined by the individual's attending provider, even if such service
is not generally covered under the plan or coverage. These proposed
rules also contain separate requirements that would apply to coverage
of contraceptive items that are preventive services under the Public
Health Service Act. Specifically, these proposed rules would require
plans and issuers to cover certain recommended over-the-counter
contraceptive items without requiring a prescription and without
imposing cost-sharing requirements. In addition, the proposed rules
would require plans and issuers to cover certain recommended
contraceptive items that are drugs and drug-led combination products
without imposing cost-sharing requirements, unless a therapeutic
equivalent of the drug or drug-led combination product is covered
without cost sharing. Finally, this document proposes to require a
disclosure pertaining to coverage and cost-sharing requirements for
over-the-counter contraceptive items in plans' and issuers'
Transparency in Coverage internet-based self-service tools or, if
requested by the individual, on paper. These proposed rules would not
modify Federal conscience protections related to contraceptive coverage
for employers, plans and issuers.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below by December 27, 2024.
ADDRESSES: Written comments may be submitted to the address specified
below. Any comment that is submitted will be shared with the Department
of the Treasury, Internal Revenue Service, and the Department of Health
and Human Services (HHS). Commenters should not submit duplicates.
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 are posted on the
internet exactly as received and can be retrieved by most internet
search engines. No deletions, modifications, or redactions will be made
to the comments received, as they are public records. Comments may be
submitted anonymously.
In commenting, please refer to file code 1210-AC25.
Comments must be submitted in one of the following two ways (please
choose only one of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to https://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By mail. You may mail written comments to the following address
ONLY: Office of Health Plan Standards and Compliance Assistance,
Employee Benefits Security Administration, Room N-5653, U.S. Department
of Labor, Washington, DC 20210, Attention: 1210-AC25.
Always allow sufficient time for mailed comments to be received
before the close of the comment period. Because of staff and resource
limitations, the Departments cannot accept comments by facsimile (FAX)
transmission.
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. The comments are posted on
the following website as soon as possible after they have been
received: https://www.regulations.gov. Follow the search instructions
on that website to view public comments.
Plain Language Summary: In accordance with 5 U.S.C. 553(b)(4), a
summary of these proposed rules of not more than 100 words in length,
in plain language, may be found at https://www.regulations.gov/.
FOR FURTHER INFORMATION CONTACT: Regan Rusher, Internal Revenue
Service, Department of the Treasury, at (202) 317-5500. Matthew
Meidell, Employee Benefits Security Administration, Department of
Labor, at (202) 693-8335. Rebecca Miller, Employee Benefits Security
Administration, Department of Labor, at (202) 693-8335. Geraldine
Doetzer, Centers for Medicare & Medicaid Services, Department of Health
and Human Services at (667) 290-8855. Kendra May, Centers for Medicare
& Medicaid Services, Department of Health and Human Services at (301)
448-3996.
Customer Service Information: Individuals interested in obtaining
information from the Department of Labor (DOL) concerning employment-
based health coverage laws may call the Employee Benefits Security
Administration (EBSA) Toll-Free Hotline at 1-866-444-EBSA (3272) or
visit the DOL's website (www.dol.gov/ebsa). In addition, information
from HHS on private health insurance coverage and on non-Federal
governmental plans can be found on the Centers for Medicare & Medicaid
Services (CMS) website (www.cms.gov/cciio), and information on health
care reform can be found at www.HealthCare.gov.
SUPPLEMENTARY INFORMATION:
I. Background
A. Coverage of Preventive Services Under the Affordable Care Act and
Implementing Regulations
The Patient Protection and Affordable Care Act (Pub. L. 111-148)
was enacted on March 23, 2010. The Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111-152) was enacted on March
[[Page 85751]]
30, 2010. These statutes are collectively known as the Affordable Care
Act (ACA). The ACA reorganized, amended, and added to the provisions of
part A of title XXVII of the Public Health Service Act (PHS Act)
relating to group health plans and health insurance issuers in the
group and individual markets. The ACA added section 715(a)(1) to the
Employee Retirement Income Security Act of 1974 (ERISA) \1\ and section
9815(a)(1) to the Internal Revenue Code (Code) \2\ to incorporate the
provisions of part A of title XXVII of the PHS Act into ERISA and the
Code, and to make them applicable to group health plans and health
insurance issuers providing health insurance coverage in connection
with group health plans.
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\1\ 29 U.S.C. 1185d.
\2\ 26 U.S.C. 9815.
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Section 2713 of the PHS Act,\3\ as added by section 1001 of the ACA
and incorporated into ERISA and the Code, and its implementing
regulations require that non-grandfathered group health plans and
health insurance issuers offering non-grandfathered group or individual
health insurance coverage (plans and issuers) provide coverage without
imposing any cost-sharing requirements for the following items and
services: \4\
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\3\ 42 U.S.C. 300gg-13.
\4\ The items and services described in these recommendations
and guidelines are referred to in this preamble as ``recommended
preventive services.''
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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 (USPSTF) with respect to the
individual involved, except for the recommendations of the USPSTF
regarding breast cancer screening, mammography, and prevention issued
in or around November 2009; 5 6
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\5\ The USPSTF published updated breast cancer screening
recommendations in April 2024. However, section 223 of title II of
Division D of the Further Consolidated Appropriations Act, 2024
(Pub. L. 118-47) requires that for purposes of PHS Act section 2713,
USPSTF recommendations relating to breast cancer screening,
mammography, and prevention issued before 2009 remain in effect
until January 1, 2026.
\6\ On September 19, 2024, the Departments filed a petition for
a writ of certiorari requesting U.S. Supreme Court review of the
decision of the U.S. Court of Appeals for the Fifth Circuit in
Braidwood Management v. Becerra, which found in part that the
actions taken by the Departments under section 2713(a) of the PHS
Act to require coverage of certain preventive services recommended
by the USPSTF are unconstitutional and unenforceable by the
Departments as to the named plaintiffs. See 104 F.4th 930 (5th Cir.
2024), petition for cert. filed (U.S. Sept. 19, 2024) (No. 24-316).
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Immunizations for routine use in children, adolescents,
and adults that have in effect a recommendation from the Advisory
Committee on Immunization Practices (ACIP) of the Centers for Disease
Control and Prevention (CDC) with respect to the individual involved;
\7\
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\7\ In addition, under section 3203 of the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act), enacted on March 27,
2020 (Pub. L. 116-136), plans and issuers must cover, without cost-
sharing requirements, any qualifying coronavirus preventive service
pursuant to section 2713(a) of the PHS Act and its implementing
regulations (or any successor regulations). The term ``qualifying
coronavirus preventive service'' means an item, service, or
immunization that is intended to prevent or mitigate coronavirus
disease 2019 (COVID-19) and that is (1) an evidence-based item or
service that has in effect a rating of ``A'' or ``B'' in the current
USPSTF recommendations; or (2) an immunization that has in effect a
recommendation from ACIP with respect to the individual involved.
See FAQs about Families First Coronavirus Response Act, Coronavirus
Aid, Relief, and Economic Security Act, and Health Insurance
Portability and Accountability Act Implementation Part 58, Q4 (Mar.
29, 2023), available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-58.pdf and
https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/downloads/faqs-part-58.pdf.
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With respect to infants, children, and adolescents,
evidence-informed preventive care and screenings provided for in
comprehensive guidelines supported by the Health Resources and Services
Administration (HRSA); and
With respect to women,\8\ such additional preventive care
and screenings not described in the USPSTF recommendations in PHS Act
section 2713(a)(1), as provided for in comprehensive guidelines
supported by HRSA.\9\
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\8\ Consistent with the terminology in the statute, for purposes
of coverage of contraceptive items, these proposed rules use the
term ``women'' to refer to all individuals potentially capable of
becoming pregnant. Plans and issuers are required to cover
contraceptive services for all such individuals consistent with the
requirements in 26 CFR 54.9815-2713, 29 CFR 2590.715-2713, and 45
CFR 147.130. See FAQs about Affordable Care Act Implementation Part
XXVI, Q5 (May 11, 2015), available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-xxvi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/aca_implementation_faqs26.pdf.
\9\ For accommodations and exemptions with respect to coverage
of recommended contraceptive services, see 26 CFR 54.9815-2713A, 29
CFR 2590.715-2713A, and 45 CFR 147.131 through 147.133.
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On August 1, 2011, HRSA established the HRSA-supported Women's
Preventive Services Guidelines (HRSA-supported Guidelines) based on
recommendations from a Department of Health and Human Services' (HHS)
commissioned study by the Institute of Medicine.\10\ Among other
recommended items and services, the 2011 HRSA-supported Guidelines
addressed contraceptive methods and counseling as a type of preventive
service and included all Food and Drug Administration (FDA)-approved
``contraceptive methods, sterilization procedures, and patient
education and counseling for all women with reproductive capacity.''
\11\ The HRSA-supported Guidelines' recommendation on contraception has
been updated several times, including in 2016,\12\ and most recently in
2021.\13\ The 2011 HRSA-supported Guidelines included for each type of
preventive service a column labeled ``Frequency,'' which for
contraceptive methods and counseling, stated, ``as prescribed.'' The
``Frequency'' column does not appear in the 2016, 2019, or 2021 updated
HRSA-supported Guidelines for any preventive service, and the updated
HRSA-supported Guidelines do not contain language that specifies
frequency in accordance with a prescription for contraceptive methods
(or contraceptives) by a health care provider Plans and issuers are
required to provide coverage of women's preventive services, including
contraceptive items and services, without cost sharing, consistent with
the 2021 HRSA-supported Guidelines, for plan years and policy years
beginning on or after December 30, 2022.\14\ The 2021 HRSA-supported
Guidelines refer, under the header
[[Page 85752]]
``Contraception,'' to ``the full range of contraceptives and
contraceptive care to prevent unintended pregnancies and improve birth
outcomes.'' The term ``contraceptive methods'' was replaced in 2021 by
``contraceptives.'' \15\ With the removal of the phrase ``female-
controlled,'' as HRSA explained,\16\ male condoms are included in the
2021 HRSA-supported Guidelines, which also include ``screening,
education, counseling, and provision of contraceptives (including in
the immediate postpartum period)'' including ``follow-up care (e.g.,
management, evaluation and changes, including the removal,
continuation, and discontinuation of contraceptives).'' \17\ The 2021
HRSA-supported Guidelines recommend ``the full range of U.S. Food and
Drug Administration (FDA)-approved, -granted, or -cleared
contraceptives, effective family planning practices, and sterilization
procedures be available as part of contraceptive care.'' \18\
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\10\ See HRSA (2011), ``Women's Preventive Services: Required
Health Plan Coverage,'' available at: https://web.archive.org/web/20130526033922/https:/www.hrsa.gov/womensguidelines/index.html; see
also Institute of Medicine, ``Clinical Preventive Services for
Women: Closing the Gaps'' (2011), available at https://nap.nationalacademies.org/read/13181/chapter/7.
\11\ The references in this preamble to ``contraception,''
``contraceptive,'' ``contraceptive coverage,'' ``contraceptive
services,'' ``contraceptive product,'' or ``contraceptive item''
generally include all contraceptives, sterilization, and related
patient education and counseling recommended by the currently
applicable HRSA-supported Guidelines, unless otherwise indicated.
\12\ The HRSA-supported Guidelines, as amended in December 2016,
refer, under the header ``Contraception,'' to: ``the full range of
female-controlled U.S. Food and Drug Administration-approved
contraceptive methods, effective family planning practices, and
sterilization procedures,'' ``contraceptive counseling, initiation
of contraceptive use, and follow-up care (e.g., management, and
evaluation as well as changes to and removal or discontinuation of
the contraceptive method),'' and ``instruction in fertility
awareness-based methods, including the lactation amenorrhea
method.'' See https://www.hrsa.gov/womens-guidelines-2016/
index.html.
\13\ See HRSA, ``Women's Preventive Services Guidelines: Current
Guidelines,'' available at https://www.hrsa.gov/womens-guidelines.
\14\ The Departments' regulations under section 2713 of the PHS
Act at 26 CFR 54.9815-2713T, 29 CFR 2590.715-2713, and 45 CFR
147.130 require that plans and issuers provide coverage of
recommended preventive services generally for plan years (in the
individual market, policy years) that begin on or after September
23, 2010, or, if later, for plan years (in the individual market,
policy years) that begin on or after the date that is one year after
the date the recommendation or guideline is issued.
\15\ See 86 FR 59741, 59742 (Oct. 28, 2021).
\16\ HRSA stated that this change was made to allow women to
purchase male condoms for pregnancy prevention. See id.
\17\ See HRSA, Women's Preventive Services Guidelines, available
at https://www.hrsa.gov/womens-guidelines/index.html (version last
reviewed March 2024, accessed September 25, 2024).
\18\ Id.
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The Departments of the Treasury, Labor, and HHS (the Departments)
previously issued rulemaking to implement the preventive services
requirements of section 2713 of the PHS Act, using their authority
under section 9833 of the Code, section 734 of ERISA, and section 2792
of the PHS Act.\19\ On July 19, 2010, the Departments issued interim
final rules (July 2010 interim final rules) at 26 CFR 54.9815-2713T, 29
CFR 2590.715-2713, and 45 CFR 147.130, which require that plans and
issuers provide coverage of recommended preventive services generally
for plan years or policy years that begin on or after September 23,
2010; or, if later, for plan years or policy years that begin on or
after the date that is one year after the recommendation or guideline
is issued.\20\ Among other provisions, the July 2010 interim final
rules allow plans and issuers to rely on the relevant clinical evidence
base to impose reasonable medical management techniques to determine
the frequency, method, treatment, or setting for coverage of a
recommended preventive health item or service, to the extent not
specified in the applicable recommendation or guideline.\21\
Additionally, if a plan or issuer has a provider in its network that
can provide a recommended preventive service, the July 2010 interim
final rules specify that the plan or issuer is not required to provide
coverage or waive cost sharing for the item or service when delivered
by an out-of-network provider.\22\ However, if a plan or issuer does
not have in its network a provider who can provide a recommended
preventive service (or the plan or coverage does not have a network),
the plan or issuer must cover the item or service when performed by an
out-of-network provider, and may not impose any cost-sharing
requirements with respect to the item or service. The Departments
finalized these rules on July 14, 2015.\23\
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\19\ 26 U.S.C. 9833, 29 U.S.C. 1191c, and 42 U.S.C. 300gg-92.
\20\ 75 FR 41726 (July 19, 2010).
\21\ 26 CFR 54.9815-2713T(a)(4); 29 CFR 2590.715-2713(a)(4); and
45 CFR 147.130(a)(4).
\22\ 26 CFR 54.9815-2713T(a)(3); 29 CFR 2590.715-2713(a)(3); and
45 CFR 147.130(a)(3).
\23\ 80 FR 41318 (July 14, 2015).
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The Departments have also previously issued rules that provide
exemptions from the contraceptive coverage requirement for entities and
individuals with moral or religious objections to contraceptive
coverage, and accommodations through which objecting entities are not
required to contract, arrange, pay, or provide a referral for
contraceptive coverage, while at the same time ensuring that
participants, beneficiaries, and enrollees enrolled in coverage
sponsored or arranged by an objecting entity could separately obtain
contraceptive services at no additional cost.\24\ Most recently, on
February 2, 2023, the Departments issued proposed rules (2023 proposed
rules) to rescind the moral exemption to the contraceptive coverage
requirement and to establish a new ``individual contraceptive
arrangement,'' an independent pathway that individuals enrolled in
plans or coverage sponsored, arranged, or provided by objecting
entities could use to obtain contraceptive services at no cost directly
from a provider or facility that furnishes contraceptive services.\25\
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\24\ These proposed rules would not modify Federal conscience
protections related to contraceptive coverage for employers, plans
and issuers. The rules related to optional accommodations for
certain eligible entities (26 CFR 54.9815-2713A, 29 CFR 2510.3-16
and 2590.715-2713A, and 45 CFR 147.131) and religious (45 CFR
147.132) and moral (45 CFR 147.133) exemptions in connection with
the coverage of certain recommended preventive services--as well as
the conscience protections that apply to certain health care
providers, patients, and other participants (45 CFR part 88)--are
outside the scope of these proposed rules. For a detailed overview
of the regulatory and judicial history of Departmental rules
specifically related to optional accommodations and religious and
moral exemptions from the contraceptive coverage requirement, see 88
FR 7236, 7237-40 (Feb. 2, 2023). For additional information on the
Department of Health and Human Services' final rule on enforcement
of religious freedom and conscience laws, see 89 FR 2078 (Jan. 11,
2024).
\25\ 88 FR 7236.
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B. Guidance Related to the Coverage of Recommended Preventive Services
Since publishing the July 2010 interim final rules, the Departments
have issued extensive guidance related to the requirement to cover
recommended preventive services, including contraceptive services,
without cost sharing under section 2713 of the PHS Act and its
implementing regulations. These guidance documents respond to questions
from interested parties regarding the requirement to provide coverage
for recommended preventive services without cost sharing.\26\
Cumulatively, this body of guidance interprets key elements of the
preventive health services recommendations and guidelines and coverage
requirements, including with respect to the allowed use of reasonable
medical management techniques.\27\ These guidance documents include:
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\26\ See FAQs about Affordable Care Act Implementation Part XII
(Feb. 20, 2013), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xii.pdf and www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs12.html; FAQs about Affordable Care Act
Implementation Part XXVI (May 11, 2015), available at https://
www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/
resource-center/faqs/aca-part-xxvi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/aca_implementation_faqs26.pdf; FAQs about Affordable Care Act
Implementation Part 31, Mental Health Parity Implementation, and
Women's Health and Cancer Rights Act Implementation (April 20,
2016), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-31.pdf and
https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/downloads/faqs-31_final-4-20-16.pdf; FAQs about Affordable Care Act
Implementation Part 51, Families First Coronavirus Response Act, and
Coronavirus Aid, Relief, and Economic Security Act Implementation
(Jan. 10, 2022), available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-51.pdf and https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/FAQs-Part-51.pdf; FAQs about Affordable Care Act
Implementation Part 54 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.; and FAQs about Affordable Care Act
Implementation Part 64 (Jan. 22, 2024) available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-64 and https://www.cms.gov/files/document/faqs-part-64.pdf.
\27\ As noted in section I.A of the preamble to these proposed
rules, under 26 CFR 54.9815-2713T(a)(4), 29 CFR 2590.715-2713(a)(4),
and 45 CFR 147.130(a)(4), plans and issuers may use ``reasonable
medical management techniques'' to determine the frequency, method,
treatment, or setting for a recommended preventive service, to the
extent this information is not specified in a recommendation or
guideline. Plans and issuers may rely on established techniques and
the relevant clinical evidence base to determine the frequency,
method, treatment, or setting for coverage of a recommended
preventive health item or service where cost sharing must be waived.
Whether a medical management technique is reasonable depends on all
the relevant facts and circumstances. See FAQs Part 54, Q8 (July 28,
2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and
https://www.cms.gov/files/document/faqs-part-54.pdf.
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[[Page 85753]]
Frequently Asked Questions on February 20, 2013 (FAQs Part
XII), which, among other things, clarified the scope of reasonable
medical management with respect to recommended preventive services,
including contraceptive items and services. The FAQs specified that
plans and issuers must cover ``the full range of FDA-approved
contraceptive methods'' and must design reasonable medical management
techniques to include accommodations for the specific medical needs of
an individual. FAQs Part XII, Q14 noted that plans may, for example,
cover a generic drug without cost sharing and impose cost sharing for
equivalent branded drugs. If, however, a generic version is not
available, or would not be medically appropriate for the patient (as
determined by the attending provider, in consultation with the
patient), then a plan or issuer must have a mechanism to provide
coverage for the brand name drug without any cost sharing.\28\ FAQs
Part XII also interpreted the statutory and regulatory requirements to
cover recommended preventive services without cost sharing to mean that
recommended preventive services (including contraceptive products) that
are generally available without a prescription must be covered without
cost sharing only when prescribed by a health care provider.\29\
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\28\ See FAQs Part XII, Q14 (Feb. 20, 2013), available at
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xii.pdf and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/aca_implementation_faqs12.
\29\ See id. at Q4 and Q15. As noted elsewhere in this section
I.B, the language ``as prescribed'' appeared in the HRSA-supported
Guidelines until 2016.
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Frequently Asked Questions on May 11, 2015 (FAQs Part
XXVI), which clarified that plans and issuers must cover, without cost
sharing, at least one form of contraception in each method \30\ that is
identified by the FDA in its Birth Control Guide.\31\ FAQs Part XXVI
further clarified the scope of reasonable medical management techniques
by specifying that if multiple services and FDA-approved items within a
contraceptive category are medically appropriate for an individual, the
plan or issuer may use reasonable medical management techniques to
determine which specific products to cover without cost sharing with
respect to that individual and, subject to the relevant facts and
circumstances, generally may impose cost sharing (including full cost
sharing) on some items and services to encourage an individual to use
other specific items and services within the chosen contraceptive
category.\32\ However, if the individual's attending provider \33\
recommends a particular service or FDA-approved, -cleared, or -granted
item based on a determination of medical necessity with respect to that
individual, the plan or issuer must defer to the determination of the
attending provider with respect to the individual involved, and cover
that item or service without cost sharing.\34\ Additionally, FAQs Part
XXVI specified that to the extent a plan or issuer uses reasonable
medical management techniques within a specified method of
contraception, the plan or issuer must have an easily accessible,
transparent, and sufficiently expedient exceptions process that is not
unduly burdensome on the individual or a provider (or other individual
acting as a patient's authorized representative) to ensure coverage
without cost sharing of any service or FDA-approved item within the
specified method of contraception that has been recommended by the
individual's attending provider based on a determination of medical
necessity.\35\
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\30\ As noted in FDA's Birth Control Guide (Chart), published in
May 2024, available at https://www.fda.gov/media/150299/download,
the FDA approves, clears, and grants marketing authorization for
individual contraceptive products, not ``methods.'' However, for
purposes of this chart, which includes birth control options broader
than products, the term ``methods'' is used. Similarly, FAQs Part
XXVI used the term ``methods'' consistent with the then-current FDA
Birth Control Guide.
\31\ FAQs Part XXVI referenced the then-current 2015 FDA Birth
Control Guide, which identified 18 contraceptive methods for women,
but noted that the ``FDA Birth Control Guide additionally lists
sterilization surgery for men and male condoms, but the HRSA
Guidelines exclude services relating to a man's reproductive
capacity.'' See FAQs Part XXVI, fn. 12, available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-xxvi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/aca_implementation_faqs26.pdf. The 2021 HRSA-supported Guidelines
incorporated by reference a subsequent update of the FDA Birth
Control Guide (as published on December 22, 2021), and now describes
the full range of contraceptives to include: ``(1) sterilization
surgery for women, (2) implantable rods, (3) copper intrauterine
devices, (4) intrauterine devices with progestin (all durations and
doses), (5) injectable contraceptives, (6) oral contraceptives
(combined pill), 7) oral contraceptives (progestin only), (8) oral
contraceptives (extended or continuous use), (9) the contraceptive
patch, (10) vaginal contraceptive rings, (11) diaphragms, (12)
contraceptive sponges, (13) cervical caps, (14) condoms, (15)
spermicides, (16) emergency contraception (levonorgestrel), and (17)
emergency contraception (ulipristal acetate), and any additional
contraceptives approved, granted, or cleared by the FDA.'' See FAQs
Part 64 (Jan. 22, 2024), available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-64.pdf and https://www.cms.gov/files/document/faqs-part-64.pdf. The 2021 HRSA-supported Guidelines also state:
``Additionally, instruction in fertility awareness-based methods,
including the lactation amenorrhea method, although less effective,
should be provided for women desiring an alternative method.''
\32\ See FAQs Part XXVI, Q3 (May 11, 2015), available at https:/
/www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/
resource-center/faqs/aca-part-xxvi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/aca_implementation_faqs26.pdf. For example, a plan could use cost
sharing to encourage use of one of several FDA-approved intrauterine
devices (IUDs) with progestin by imposing cost sharing on the more
costly IUD with progestin while waiving cost sharing for a less
costly IUD with progestin.
\33\ See id. at Q1, fn. 13 (``An attending provider means an
individual who is licensed under applicable State law, who is acting
within the scope of the provider's license, and who is directly
responsible for providing care to the patient relating to the
recommended preventive services. Therefore, a plan, issuer,
hospital, or managed care organization is not an attending
provider.'')
\34\ See id. at introduction and Q3.
\35\ Id. at Q2.
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Frequently Asked Questions on April 20, 2016 (FAQs Part
31), which further clarified the requirements on plans and issuers with
respect to the development and implementation of an exceptions process,
including that plans and issuers that meet all other requirements are
permitted to develop and utilize a standard exceptions process form
(such as the Medicare Part D Coverage Determination Request Form) and
instructions as part of the exceptions process.\36\
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\36\ FAQs Part 31, Q2 (April 20, 2016), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-31.pdf and https://www.cms.gov/CCIIO/
Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-31_Final-4-20-16.pdf.
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Frequently Asked Questions on July 19, 2021 (FAQs Part
47), which followed USPSTF's release on June 11, 2019 of a
recommendation with an ``A'' rating that clinicians offer preexposure
prophylaxis (PrEP) with ``effective antiretroviral therapy to persons
who are at high risk of human immunodeficiency virus (HIV)
acquisition.'' \37\ FAQs Part 47 clarified
[[Page 85754]]
that plans and issuers are required to cover, without cost sharing, all
items and services that USPSTF recommends should be received prior to
being prescribed PrEP and for ongoing follow-up and monitoring. These
items and services include specific baseline and monitoring services,
such as laboratory testing and adherence counseling. The FAQs also
clarified that plans and issuers utilizing reasonable medical
management must have an easily accessible, transparent, and
sufficiently expedient exceptions process that is not unduly burdensome
on the individual or a provider (or other individual acting as an
authorized representative).
---------------------------------------------------------------------------
\37\ FAQs about Affordable Care Act Implementation Part 47 (July
19, 2021), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-47.pdf and
https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/downloads/faqs-part-47.pdf. Note that USPSTF subsequently updated the
recommendation referenced in FAQs Part 47. See USPSTF, Prevention of
Acquisition of HIV: Preexposure Prophylaxis, updated August 22,
2023, available at https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/prevention-of-human-immunodeficiency-virus-hiv-infection-pre-exposure-prophylaxis.
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Frequently Asked Questions on January 10, 2022 (FAQs Part
51), which acknowledged complaints received about compliance with the
contraceptive coverage requirement and clarified currently applicable
guidance. Specifically, FAQs Part 51, Q9 was issued in response to
complaints and public reports of potential violations of the
contraceptive coverage requirement, including that plans and issuers
and pharmacy benefit managers (PBMs) were not adhering to requirements
for utilizing reasonable medical management techniques. The FAQs also
highlighted several examples of such potential violations, including
denying coverage for all or particular brand name contraceptives, even
after the individual's attending provider determines and communicates
to the plan or issuer that a particular service or FDA-approved, -
cleared, or -granted contraceptive product is medically necessary with
respect to that individual; requiring individuals to fail first using
numerous other services or FDA-approved, -cleared, or -granted
contraceptive products within the same method of contraception before
the plan or issuer will approve coverage for a service or FDA-approved,
-cleared, or -granted contraceptive product that is medically
appropriate for the individual, as determined by the individual's
attending health care provider; requiring individuals to fail first
using numerous other services or FDA-approved, -cleared, or -granted
contraceptive products in other contraceptive methods before the plan
or issuer will approve coverage for a service or FDA-approved, -
cleared, or -granted contraceptive product that is medically
appropriate for the individual, as determined by the individual's
attending health care provider; and failing to provide an acceptable
exceptions process (for example, by requiring individuals to appeal an
adverse benefit determination using the plan's or issuer's internal
claims and appeals process, rather than providing an exceptions process
that is easily accessible, transparent, sufficiently expedient, and not
unduly burdensome).\38\
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\38\ FAQs Part 51, Q9 (Jan. 10, 2022), available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-51.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-51.pdf.
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Frequently Asked Questions on July 28, 2022 (FAQs Part
54), which further clarified the contraceptive coverage requirement and
currently applicable guidance. These FAQs clarified that plans and
issuers must cover, without imposing cost-sharing requirements, items
and services that are integral to a recommended contraceptive
service.\39\ The FAQs also stated that plans and issuers must cover any
FDA-approved, -cleared, or -granted contraceptive products and services
that an individual and their attending provider have determined to be
medically appropriate for the individual, regardless of whether those
products or services are specifically identified in the categories
listed in the HRSA-supported Guidelines.\40\ For contraceptive services
or FDA-approved, -cleared, or -granted contraceptive products not
included in a category described in the HRSA-supported Guidelines, the
FAQs stated that plans and issuers may use reasonable medical
management techniques to determine which specific products to cover
without cost sharing only if multiple, substantially similar services
or products that are not included in a category described in the HRSA-
supported Guidelines are medically appropriate for the individual. The
FAQs further stated that if the individual's attending provider
recommends a particular service or FDA-approved, -cleared, or -granted
product not included in a category described in the HRSA-supported
Guidelines based on a determination of medical necessity with respect
to that individual, the plan or issuer must cover that service or
product without cost sharing. The plan or issuer must defer to the
determination of the attending provider and must make available an
easily accessible, transparent, and sufficiently expedient exceptions
process that is not unduly burdensome so the individual or their
provider (or other individual acting as the individual's authorized
representative) can obtain coverage for the medically necessary service
or product for the individual without cost sharing as required under
PHS Act section 2713 and its implementing regulations and guidance.\41\
The FAQs also encouraged plans and issuers to cover over-the-counter
(OTC) emergency contraceptive products with no cost sharing when they
are purchased by consumers without a prescription.\42\ FAQs Part 54, Q8
further acknowledged that the Departments continued to receive
complaints and reports that participants, beneficiaries, and enrollees
were being denied contraceptive coverage, in some cases due to the
application of medical management techniques that were not reasonable
based on all of the relevant facts and circumstances. In addition to
summarizing ongoing complaints similar to those highlighted in FAQs
Part 51, Q9, the Departments also noted that they were aware of
complaints that plans and issuers or PBMs were imposing age limits on
contraceptive coverage rather than providing these benefits to all
individuals with reproductive capacity. FAQs Part 54, Q13 also
described actions within the scope of the authority of the Departments
of Labor and HHS to enforce the requirements of PHS Act section
2713.\43\
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\39\ FAQs Part 54, Q1 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
\40\ Id. at Q2.
\41\ Id. at Q3.
\42\ Id. at Q5.
\43\ See FAQs Part 54, Q5, Q8, and Q13 (July 28, 2022),
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
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Frequently Asked Questions on January 22, 2024 (FAQs Part
64), which provided further clarifications regarding contraceptive
coverage requirements, including providing guidance regarding a
therapeutic equivalence approach. The FAQs explained that plans and
issuers could adopt a therapeutic equivalence approach (in combination
with an easily accessible, transparent, and sufficiently expedient
exceptions process that is not unduly burdensome) to ensure the plan's
or issuer's medical management techniques for contraceptive drugs and
drug-led devices \44\ that are required to
[[Page 85755]]
be covered under PHS Act section 2713 are reasonable.\45\ Specifically,
with respect to FDA-approved contraceptive drugs and drug-led devices,
if a plan or issuer utilizes medical management techniques within a
specified category described in the HRSA-supported Guidelines (or group
of substantially similar products that are not included in a specified
category), the Departments will generally consider such medical
management techniques to be reasonable if the plan or issuer covers all
FDA-approved contraceptive drugs and drug-led devices in that category
(or group of substantially similar products) without cost sharing,
other than those for which there is at least one therapeutic equivalent
drug or drug-led device that the plan or issuer covers without cost
sharing.
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\44\ In FAQs Part 64, the term ``drug-led device'' referred to a
combination product, as defined under 21 CFR 3.2(e), that is
comprised of a drug and a device, and for which the drug component
provides the primary mode of action. The primary mode of action of a
combination product is the single mode of action (that is, the
action provided by the drug, device, or biological product) that
provides the most important therapeutic action of the combination
product. See 21 U.S.C. 353(g)(1)(C) and 21 CFR 3.2(m). As further
discussed in section II.A.2 of the preamble to these proposed rules,
the Departments propose a substantially similar definition of the
term ``drug-led combination product'' in these proposed rules to
refer to the same products for which the term ``drug-led device''
was used in FAQs Part 64.
\45\ FAQs Part 64 (Jan. 22, 2024), available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-64.pdf and https://www.cms.gov/files/document/faqs-part-64.pdf.
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C. Executive Orders on the Affordable Care Act and Reproductive Health
On January 28, 2021, President Biden issued Executive Order 14009,
``Strengthening Medicaid and the Affordable Care Act'' (E.O.
14009).\46\ Section 3 of E.O. 14009 directs the Secretaries of the
Departments (the Secretaries) to review all existing regulations,
guidance documents, and policies to determine whether such actions are
inconsistent with protecting and strengthening Medicaid and the ACA and
making high-quality health care accessible and affordable for every
American.
---------------------------------------------------------------------------
\46\ 86 FR 7793.
---------------------------------------------------------------------------
On April 5, 2022, President Biden issued Executive Order 14070,
``Continuing To Strengthen Americans' Access to Affordable, Quality
Health Coverage'' (E.O. 14070).\47\ Section 2 of E.O. 14070 reaffirms
the goals and policy of E.O. 14009 and further directs agencies with
responsibilities related to Americans' access to health coverage to
consider and pursue agency actions that improve the comprehensiveness
of coverage and protect consumers from low-quality coverage.
---------------------------------------------------------------------------
\47\ 87 FR 20689.
---------------------------------------------------------------------------
Following the U.S. Supreme Court decision in Dobbs v. Jackson
Women's Health Organization (Dobbs),\48\ President Biden issued
Executive Order 14076, ``Protecting Access to Reproductive Healthcare
Services'' (E.O. 14076) on July 8, 2022. Section 3 of E.O. 14076
requires the Secretary of HHS to identify potential actions to
``protect and expand access to the full range of reproductive
healthcare services, including actions to enhance family planning
services such as access to emergency contraception'' and identify
``ways to increase outreach and education about access to reproductive
healthcare services, including by launching a public awareness
initiative to provide timely and accurate information about such
access, which shall . . . include promoting awareness of and access to
the full range of contraceptive services.'' \49\
---------------------------------------------------------------------------
\48\ 597 U.S. 215 (2022).
\49\ 87 FR 42053.
---------------------------------------------------------------------------
On June 23, 2023, President Biden issued Executive Order 14101,
``Strengthening Access to Affordable, High-Quality Contraception and
Family Planning Services'' (E.O. 14101).\50\ Section 2 of E.O. 14101
directs the Secretaries to consider issuing guidance ``to further
improve Americans' ability to access contraception, without out-of-
pocket expenses, under the Affordable Care Act'' and to consider
additional actions ``to promote increased access to affordable over-
the-counter contraception, including emergency contraception.'' \51\
---------------------------------------------------------------------------
\50\ 88 FR 41815.
\51\ Id.
---------------------------------------------------------------------------
D. FDA Approval of Daily Over-the-Counter Oral Contraceptive
On July 13, 2023, the FDA announced that it had approved a
progestin-only birth control pill as the first daily oral contraceptive
for use in the United States available without a
prescription.52 53 Interested parties, including health care
provider associations, have supported the availability of a daily OTC
oral contraceptive for its potential to improve access to affordable
contraception, thereby improving management of family planning and
reducing unintended pregnancies.\54\ Studies have shown that challenges
with access and costs are among the most common reasons cited by women
for not using contraception or having gaps in contraceptive use.\55\
One large, nationally representative study found 29 percent of women
reported encountering barriers to obtaining or filling an initial
prescription or refills of oral contraceptive pills, specifically
citing insurance coverage, getting an appointment, not having a regular
provider, and difficulty accessing a pharmacy.\56\ Accordingly, the
availability of a daily OTC oral contraceptive could improve access to
contraception if the product is affordable, including if it is covered
by insurance without cost sharing, and as a result, could reduce the
number of unintended pregnancies.\57\ Beginning in March 2024, an OTC
oral contraceptive has become widely available for sale online and in
stores under the brand name Opill[supreg], with a manufacturer's
[[Page 85756]]
suggested retail price ranging from $19.99 for a 1-month supply to
$89.99 for a 6-month supply.\58\
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\52\ FDA (July 13, 2023). ``FDA Approves First Nonprescription
Daily Oral Contraceptive,'' available at https://www.fda.gov/news-events/press-announcements/fda-approves-first-nonprescription-daily-oral-contraceptive.
\53\ Progestin-only oral contraceptives are a product that is
already available in a prescription form and are a category of
contraceptives listed in the FDA Birth Control Guide, as referenced
in the HRSA-supported Guidelines.
\54\ See American Medical Association (2023). ``AMA Applauds FDA
Approval of OTC Birth Control,'' available at https://www.ama-assn.org/press-center/press-releases/ama-applauds-fda-approval-otc-birth-control; The American College of Obstetricians and
Gynecologists (2023). ``ACOG Praises FDA Approval of Over-the-
Counter Access to Birth Control Pill,'' available at https://www.acog.org/news/news-releases/2023/07/acog-praises-fda-approval-of-over-the-counter-access-to-birth-control-pill.
\55\ See Key, K., Wollum, A., Asetoyer, C., Cervantes, M.,
Lindsey, A., Rivera, R., Robinson Flint, J., Zuniga, C., Sanchez,
J., and Baum, S. (2023). ``Challenges accessing contraceptive care
and interest in over-the-counter oral contraceptive pill use among
Black, Indigenous, and people of color: An online cross-sectional
survey,'' Contraception, available at https://doi.org/10.1016/j.contraception.2023.109950; Thompson, E. L., Galvin, A. M., Garg,
A., Diener, A., Deckard, A., Griner, S. B., and Kline, N. S. (2023).
``A socioecological perspective to contraceptive access for women
experiencing homelessness in the United States,'' Contraception,
available at https://doi.org/10.1016/j.contraception.2023.109991;
Bessett, D., Prager, J., Havard, J., Murphy, D. J., Ag[eacute]nor,
M., and Foster, A. M. (2015). ``Barriers to contraceptive access
after health care reform: Experiences of young adults in
Massachusetts,'' Women's Health Issues, available at https://doi.org/10.1016/j.whi.2014.11.002; and Johnson, E. R. (2022).
``Health care access and contraceptive use among adult women in the
United States in 2017,'' Contraception, available at https://doi.org/10.1016/j.contraception.2022.02.008.
\56\ Grindlay, K., Grossman, D. (2016). ``Prescription Birth
Control Access Among U.S. Women At Risk of Unintended Pregnancy,''
Journal of Women's Health, available at https://www.liebertpub.com/doi/10.1089/jwh.2015.5312.
\57\ A recent study found that over 12 million adult women and
nearly two million young women aged 15-17 would likely be interested
in using an OTC oral contraceptive if it were free to them, but the
numbers declined to 7.1 million adult women and 760,000 young women
if the out-of-pocket cost of the contraceptive was $15. The same
study indicated that the levels of interest would translate to an
estimated eight percent decrease in unintended pregnancies
(approximately 320,000 fewer) in one year among adult women when
cost sharing was $0, and an estimated five percent decrease
(approximately 199,000 fewer unintended pregnancies) if there were a
monthly out-of-pocket cost of $15. See Wollum, A., Trussell, J.,
Grossman, D., and Grindlay, K. (2020). ``Modeling the Impacts of
Price of an Over-the-Counter Progestin-Only Pill on Use and
Unintended Pregnancy among U.S. Women,'' Women's Health Issues,
available at https://www.sciencedirect.com/science/article/pii/S1049386720300037/pdfft?md5=903aee27ef3468f62abaf9091e0a957c&pid=1-s2.0-S1049386720300037-main.pdf.
\58\ Lupkin, S., NPR (March 18, 2024). ``First over-the-counter
birth control pill now for sale online,'' available at https://npr.org/sections/health-shots/2024/03/04/1235404522/opill-over-counter-birth-control-pill-contraceptive-shop.
---------------------------------------------------------------------------
E. OTC Preventive Products Request for Information
As discussed in sections I.A and I.C of this preamble, the Biden-
Harris Administration has prioritized access to comprehensive, high-
quality contraception and family planning services as critical
components of women's reproductive health and overall public health. In
response to E.O. 14009, E.O. 14070, E.O.14076, and E.O. 14101, and
following the FDA approval of an OTC oral contraceptive, as discussed
in section I.D of this preamble, the Departments issued a ``Request for
Information; Coverage of Over-the-Counter Preventive Services'' on
October 4, 2023 (OTC Preventive Products RFI).\59\ The Departments
issued the OTC Preventive Products RFI to gather public feedback
regarding the potential benefits and costs of requiring plans and
issuers to cover OTC preventive products \60\ without cost sharing and
without a prescription; learn of any potential challenges associated
with providing such coverage; understand whether and how providing such
coverage would benefit consumers; and assess any potential burden that
plans and issuers would face if required to provide such coverage.
---------------------------------------------------------------------------
\59\ 88 FR 68519 (Oct. 4, 2023).
\60\ For consistency with the OTC Preventive Products RFI, this
preamble uses the term ``OTC preventive products'' to refer to
recommended preventive services that may be made available to an
individual without a prescription.
---------------------------------------------------------------------------
The Departments received 376 unique comments in response to the OTC
Preventive Products RFI, including comments from individuals; plans and
issuers; PBMs; State government agencies; and advocacy organizations
representing consumers, health care providers, group health plans,
hospitals, and durable medical equipment suppliers. The Departments
reviewed comments received in response to the OTC Preventive Products
RFI as part of the development of these proposed rules. However, these
proposed rules do not address all the issues on which information was
requested.
Many commenters stated that requiring plans and issuers to cover
all recommended preventive services would promote health equity and
improve health outcomes by reducing costs and administrative barriers
to accessing preventive health care. Many commenters highlighted that
prescription and cost-sharing requirements represent a particular
barrier for people with lower incomes and Black, Indigenous, and People
of Color (BIPOC) communities, and that requiring coverage of OTC
preventive products without cost sharing and without a prescription
would significantly lower these barriers, thereby increasing access to
OTC preventive products in a manner that would be especially beneficial
to lower-income and underserved populations.
Many commenters highlighted the particular benefit to women of
requiring plans and issuers to cover OTC contraceptive items without
requiring a prescription and without cost-sharing requirements. Several
commenters pointed out that neither section 2713 of the PHS Act nor its
implementing regulations impose a specific prescription requirement on
recommended contraceptive items. These commenters also highlighted
HRSA's removal of ``as prescribed'' language which appeared in the 2011
HRSA-supported Guidelines but does not appear in the 2016 or any
subsequent version of the HRSA-supported Guidelines.\61\ In the view of
these commenters, the existing prescription requirement is therefore
based only on agency guidance that is within the authority of the
Departments to revise.\62\
---------------------------------------------------------------------------
\61\ See section I.A of this preamble for a discussion of the
``as prescribed'' language.
\62\ See, e.g., FAQs Part XII, Q4 (Feb. 20, 2013), available at
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xii.pdf and www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs12.html.
---------------------------------------------------------------------------
Another commenter noted that, in the United States, approximately
one-third of childbearing-aged women and those capable of becoming
pregnant experience difficulties obtaining hormonal contraception, and
that coverage of OTC oral contraception without a prescription and
without cost sharing would improve access to reproductive care for this
group. Several commenters highlighted the burdens of a prescription
requirement on people seeking contraception, including requesting time
off from work, unnecessary visits to the doctor, appointment wait
times, and finding childcare, while a few other commenters specifically
emphasized the importance of waiving cost sharing to make OTC
contraceptive services truly accessible. One commenter noted that
access to affordable contraception was particularly important within
the context of widespread Medicaid coverage losses following the
termination on March 31, 2023 of the continuous enrollment condition
previously associated with the COVID-19 public health emergency
(PHE).\63\ Many other commenters supported requiring coverage of OTC
contraceptive services in order to ensure that women can access
effective, affordable means of preventing unintended pregnancies in the
wake of the Dobbs decision.
---------------------------------------------------------------------------
\63\ See Center for Medicare and Medicaid Services (CMS), Center
for Consumer Information and Insurance Oversight, Temporary Special
Enrollment Period (SEP) for Consumers Losing Medicaid or the
Children's Health Insurance Program (CHIP) Coverage Due to Unwinding
of the Medicaid Continuous Enrollment Condition--Frequently Asked
Questions (FAQ) (Jan. 27, 2023), available at https://www.cms.gov/technical-assistance-resources/temp-sep-unwinding-faq.pdf.
---------------------------------------------------------------------------
In addition to comments highlighting the benefits to women of
removing prescription and cost-sharing requirements for coverage of OTC
contraceptive items, several commenters noted that consumers would
benefit from increased access to other specific OTC preventive products
if plans and issuers were required to cover those other products
without a prescription and without cost sharing. For example, several
commenters stated that coverage based on prescription requirements
limits access to OTC tobacco cessation products. One of these
commenters emphasized that prescription requirements are a particular
barrier with respect to tobacco cessation because of the nature of
nicotine addiction, which typically requires multiple quit attempts. In
that commenter's view, removing cost-sharing and prescription
requirements would allow people to access evidence-based treatment when
they are motivated to make a quit attempt, without having to wait for a
medical appointment. Conversely, another commenter who acknowledged
that removing cost sharing on OTC tobacco cessation products could have
a positive effect on access to these products, particularly for people
with low incomes, also emphasized the role of clinicians in screening
for and diagnosing tobacco use disorder and recommending or prescribing
effective treatments. This commenter encouraged the Departments to make
an effort to preserve the clinician-patient relationship with respect
to tobacco cessation products to ensure that patients are properly
connected to care, including biomedical and psychiatric services that
may be comorbid with tobacco use disorder.
Another commenter noted that a woman who is not pregnant or
planning
[[Page 85757]]
to become pregnant may not be under the care of a prescribing health
care provider but could still benefit from the USPSTF recommendation
that women who could become pregnant should consume a daily folic acid
supplement. A few commenters described the disparate occurrence of
spina bifida in newborns born to Spanish-speaking people, which
commenters believe could be reduced if plans and issuers were required
to cover OTC folic acid without cost sharing or prescription
requirements.
However, several commenters identified operational barriers to
widespread implementation of a requirement to cover all recommended OTC
preventive products without cost sharing or a prescription. A few
commenters noted potential strains on pharmacies, retailers, and the
existing health care delivery system; fraud and abuse threats; and
potential cost increases for plan sponsors and plan participants. For
example, one commenter cited the administrative and cost burdens that
pharmacies and retailers could incur if they were required to cover the
upfront costs of OTC preventive products and pursue post-claim
reimbursements. In that commenter's view, requiring plans and issuers
to provide coverage of OTC preventive products without cost sharing
could also facilitate fraudulent behavior, including sale to
unauthorized persons or re-sale outside of the health care market, that
could in turn create a shadow market based on overuse and misuse. This
commenter highlighted the existing significant clinical and
administrative burdens that already strain pharmacist and retailer
resources (ranging from filling and dispensing medications to providing
immunizations, patient counseling, and information about insurance
eligibility and coverage), and expressed concern that the
responsibility for educating consumers about potential access to and
appropriateness of OTC contraceptives would fall to pharmacists and
retailers at the point of sale. Another commenter noted that requiring
coverage of OTC preventive products such as contraceptives, OTC
naloxone, and smoking cessation products without cost sharing or a
prescription would increase access to such products but advised that
such requirements would increase administrative burden on pharmacists
by increasing workload and costs and decreasing reimbursement for vital
patient counseling and additional services. One commenter indicated
that using a credit card (rather than a debit card or paper
reimbursement system) would facilitate coverage of OTC preventive
products, but also noted that the use of a credit card without a fixed
spending limit would be more likely to lead to fraud and would
necessitate implementing systems for freezing or repaying cards in the
case of misuse. Another commenter indicated general support for access
to recommended preventive products without cost sharing but stated that
prescription requirements were necessary for many products to ensure
that individual patients receive appropriate care. In that commenter's
view, the cost associated with applying a market-wide OTC preventive
products coverage requirement would disrupt and likely outweigh any
benefits of changing long-established coverage patterns. This commenter
recommended that the Departments consider establishing a standing order
for Opill[supreg] only, in order to conduct a targeted roll-out of a
potential broader OTC preventive products coverage requirement without
overburdening the health care system by attempting to implement the
changes for all OTC preventive products at once. The same commenter,
however, warned against requiring coverage of OTC products that do not
have meaningful market competition, such as Opill[supreg], to avoid
inadvertently driving up retail prices. Another commenter shared
similar concerns regarding the potential for generating demand for
preventive items and services that would ultimately be unused. A few
commenters noted the particular cost and negative environmental impact
that could be realized if OTC breastfeeding supplies with no cost
sharing led to overconsumption of such products. One commenter urged
the Departments to avoid rushing to require coverage of all OTC
preventive products in order to provide sufficient advanced notice to
allow plan sponsors to address operational and implementation issues.
While several commenters expressed concern that current
prescription requirements restrict access to breastfeeding services and
supplies, many commenters stated that removing the prescription
requirement for breastfeeding services and supplies could have a
detrimental effect on breastfeeding parents and newborns. These
commenters stated that consumers currently benefit from the expertise
provided by lactation consultants and other specially trained staff at
durable medical equipment suppliers contracted with plans and issuers
to provide breast pumps. These commenters also expressed the view that
removing the prescription requirement would make it more likely that a
consumer would be forced to select breastfeeding supplies in a retail
environment with fewer breast pump options and less privacy and
support.
In the OTC Preventive Products RFI, the Departments also requested
feedback from interested parties based on their experiences with the
requirement to cover OTC COVID-19 diagnostic tests during the COVID-19
PHE.\64\ During the COVID-19 PHE, plans and issuers were required to
cover OTC COVID-19 diagnostic tests without a prescription from a
health care provider and without imposing any cost-sharing
requirements, prior authorization, or other medical management
requirements. However, the Departments permitted plans and issuers that
met certain safe harbor requirements to implement cost and quantity
limits to contain costs and combat potential fraud and abuse with
respect to coverage of OTC COVID-19 diagnostic tests. A few commenters
encouraged the Departments to use experiences with coverage of OTC
COVID-19 diagnostic tests as a roadmap for future coverage of other
recommended preventive services. However, another commenter cautioned
the Departments against regulating the routine use of recommended
preventive services by applying requirements used during an
unprecedented public health emergency, in order to avoid issues the
commenter reported taking place during the COVID-19 PHE, such as
overconsumption of COVID-19 diagnostic tests, price gouging of products
by manufacturers, and limited opportunities for health plans to contain
waste and abuse. Another commenter acknowledged that coverage
requirements for OTC COVID-19 diagnostic tests improved patient access
to the tests by removing the barriers related to out-of-pocket costs
and obtaining prescriptions but described a number of other issues
associated with the testing coverage requirement. According to this
commenter, implementation challenges included below-cost reimbursement,
inconsistent requirements across plans and providers, and lack of
reimbursement for pharmacies. In particular, this commenter noted that
the average cost to a retail pharmacy provider to dispense a drug--
separate from the cost of acquiring the medication itself--is $12.40,
and that any future OTC coverage requirements should reimburse
pharmacies for both the acquisition and dispensing of products. Another
commenter, citing the speed with which
[[Page 85758]]
the OTC COVID-19 diagnostic testing program was implemented, urged the
Departments to proceed deliberately with the implementation of any
broader OTC preventive products coverage requirements. According to
this commenter, the rapid implementation of the testing coverage
requirements during the PHE contributed to consumer confusion and led
to many thousands of consumers failing to seek reimbursement for tests
that were eligible to be covered.
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\64\ See 88 FR 68519, 68523-24 (Oct. 4, 2023).
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F. Transparency in Coverage Under the ACA and Implementing Regulations
Section 2715A of the PHS Act \65\ provides that non-grandfathered
group health plans and health insurance issuers offering non-
grandfathered group or individual health insurance coverage must comply
with section 1311(e)(3) of the ACA,\66\ which addresses transparency in
health coverage and imposes certain reporting and disclosure
requirements for health plans that are seeking certification as
qualified health plans (QHPs) to be offered on an American Health
Benefits Exchange (generally referred to as an Exchange or Marketplace)
(as defined by section 1311(b)(1) of the ACA). A plan or issuer of
coverage that is not offered through an Exchange and that is subject to
section 2715A of the PHS Act is required to submit the required
information to the Secretary of HHS and the relevant State's insurance
commissioner, and to make that information available to the public.
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\65\ 42 U.S.C. 300gg-15a.
\66\ 42 U.S.C. 18031(e)(3).
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Section 1311(e)(3)(C) of the ACA requires plans, as a requirement
of certification as a QHP, to permit individuals to learn about the
amount of cost sharing (including deductibles, copayments, and
coinsurance) that the individual would be responsible for paying with
respect to the furnishing of a specific item or service by an in-
network provider in a timely manner upon the request of the individual.
Section 1311(e)(3)(C) of the ACA specifies that, at a minimum, such
information must be made available to the individual through an
internet website and through other means for individuals without access
to the internet.
On March 27, 2012, HHS issued the ``Patient Protection and
Affordable Care Act; Establishment of Exchanges and Qualified Health
Plans; Exchange Standards for Employers'' final rule (Exchange
Establishment final rule) that implemented sections 1311(e)(3)(A)
through (C) of the ACA at 45 CFR 155.1040(a) through (c) and
156.220.\67\ The Exchange Establishment final rule created standards
for QHP issuers to submit specific information related to transparency
in coverage.
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\67\ 77 FR 18310 (Mar. 27, 2012).
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On November 12, 2020, the Departments issued ``Transparency in
Coverage'' final rules (Transparency in Coverage final rules)
implementing transparency reporting requirements for non-grandfathered
group health plans and health insurance issuers offering non-
grandfathered group and individual health insurance coverage.\68\
Implementing section 1311(e)(3)(C) of the ACA and section 2715A of the
PHS Act, these rules require plans and issuers to disclose cost-sharing
information for all covered items and services available to a
participant, beneficiary, or enrollee through an internet-based self-
service tool via the plan's or issuer's member portal or, if requested
by the individual, on paper.\69\ The requirement to disclose cost-
sharing information for all covered items and services includes covered
contraceptive items or services.
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\68\ 85 FR 72158 (Nov. 12, 2020).
\69\ The Consolidated Appropriations Act, 2021 imposed a largely
duplicative requirement and added a requirement that the information
also be provided by telephone, upon request. See also FAQs Part 49,
Q3 (Aug. 20, 2021), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-49.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-49.pdf.
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The Transparency in Coverage final rules enumerate seven cost-
related elements that plans and issuers must disclose in response to a
search query by a participant, beneficiary, or enrollee for a covered
item or service furnished by a provider or providers. The self-service
tool must provide an estimate of the participant's, beneficiary's, or
enrollee's cost-sharing liability for the covered item or service,
which is calculated based on the following elements: (a) accumulated
amounts with respect to any deductibles or maximum out-of-pocket
limits; and either (b) the in-network rate, comprising a negotiated
rate or underlying fee schedule rate as applicable to the payment
model; or (c) an out-of-network allowed amount or any other rate that
provides a more accurate estimate of an amount a plan or issuer will
pay for the requested covered item or service from an out-of-network
provider. Self-service tool results must also reflect a list of the
items and services included in a bundled payment arrangement, if
applicable; notification that coverage of a specific item or service is
subject to a prerequisite, as applicable; and certain disclaimers in
plain language describing the limitations of the estimate or other
qualifications regarding the cost-sharing information disclosed.
With respect to requests for cost-sharing information for items or
services that are recommended preventive services under section 2713 of
the PHS Act, if the plan or issuer cannot determine whether the request
is for preventive or non-preventive purposes, the plan or issuer must
display the cost-sharing liability that applies for non-preventive
purposes along with a statement that the item or service may not be
subject to cost sharing if it is billed as a preventive service.
Displaying a non-zero cost-sharing liability in these circumstances
helps protect against unexpected medical bills by ensuring
participants, beneficiaries, and enrollees are aware of their potential
cost-sharing liability while the statement ensures that consumers are
made aware they can access recommended preventive services without cost
sharing. Alternatively, the Transparency in Coverage final rules permit
a plan or issuer to allow a participant, beneficiary, or enrollee to
request cost-sharing information for the specific preventive or non-
preventive item or service by including terms such as ``preventive,''
``non-preventive,'' or ``diagnostic'' as a means to request the most
accurate cost-sharing information.
Plans and issuers must ensure users can search for cost-sharing
information for a covered item or service by a specific in-network
provider or by all in-network providers using either a descriptive term
or a billing code. For covered items or services furnished by out-of-
network providers, users can search for an out-of-network allowed
amount, percentage of billed charges, or other rate that provides a
reasonably accurate estimate of the amount a plan or issuer will pay
for a covered item or service provided by out-of-network providers.
Users must also be able to input other factors utilized by the plan or
issuer that are relevant for determining the applicable cost-sharing
information or out-of-network allowed amount, such as location of
service, facility name, or dosage and permit refining and reordering of
search results.
II. Overview of the Proposed Rules
A. Coverage of Recommended Preventive Services
1. Reasonable Medical Management of Recommended Preventive Services:
Exceptions Process
The Departments' regulations implementing section 2713 of the PHS
Act aim to strike a balance between
[[Page 85759]]
ensuring participants, beneficiaries, and enrollees do not face undue
barriers to accessing their coverage of recommended preventive services
as required by law and allowing plans and issuers to contain costs,
promote efficient delivery of care, and minimize risks of fraud, waste,
and abuse. To this end, current regulations permit plans and issuers to
use reasonable medical management techniques to determine the
frequency, method, treatment, or setting for coverage of a recommended
preventive service, to the extent not specified in the applicable
recommendation or guideline.\70\ The Departments have previously
explained, in the context of certain recommended preventive services,
that they generally do not consider medical management techniques with
respect to recommended preventive services to be reasonable absent the
availability of an exceptions process.\71\
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\70\ 26 CFR 54.9815-2713(a)(4); 29 CFR 2590.715-2713(a)(4); and
45 CFR 147.130(a)(4).
\71\ See FAQs Part XXVI, Q2 (May 11, 2015), available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-xxvi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/aca_implementation_faqs26.pdf; FAQs Part 64, Q4 (Jan. 22, 2024),
available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-64.pdf and https://www.cms.gov/files/document/faqs-part-64.pdf.
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As noted in previously issued guidance and described in section I.B
of this preamble, the Departments continue to receive complaints of
potential violations related to the application of medical management
techniques that are not reasonable, including failing to provide an
exceptions process that meets the standards set forth in guidance.\72\
Further, the U.S. House of Representatives' Committee on Oversight and
Reform (Oversight Committee) published a report in October 2022
documenting the findings of its investigation into contraceptive
coverage for individuals enrolled in private health coverage. The
Oversight Committee found that insurers and PBMs surveyed denied an
average of at least 40 percent of exception requests related to
contraceptive coverage, with one PBM denying more than 80 percent of
requests in a year.\73\ To reinforce the requirement that medical
management techniques must be reasonable, the Departments propose to
codify that plans and issuers that utilize reasonable medical
management techniques with respect to recommended preventive services
would be required to accommodate any individual for whom a particular
item or service would not be medically appropriate, as determined by
the individual's attending provider, by having a mechanism for covering
or waiving the otherwise applicable cost sharing for the medically
necessary item or service. Specifically, under these proposed rules,
consistent with previous guidance,\74\ if utilizing reasonable medical
management techniques, a plan or issuer would be required to have an
easily accessible, transparent, and sufficiently expedient exceptions
process that is not unduly burdensome on the individual or a provider
(or other person acting as the individual's authorized representative)
under which the plan or issuer covers without cost sharing the
recommended preventive service according to the frequency, method,
treatment, or setting determined to be medically necessary with respect
to the individual, as determined by the individual's attending
provider. The exceptions process would ensure that an individual can
access medically necessary recommended preventive services without cost
sharing and would prevent medical management from functioning as an
unreasonable barrier to coverage under section 2713 of the PHS Act. The
Departments are authorized to issue this proposal, implementing section
2713 of the PHS Act, by section 9833 of the Code, section 734 of ERISA,
and section 2792 of the PHS Act. Nothing in this proposal, if
finalized, would require an entity to provide coverage or payments for
a contraceptive for which they have an exemption under 26 CFR 54.9815-
2713A, 29 CFR 2590.715-2713A, and 45 CFR 147.131 through 45 CFR
147.133.
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\72\ See, e.g., FAQs Part 51, Q9 (Jan. 10, 2022), available at
https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-51.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-51.pdf; FAQs Part 54, Q8 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
\73\ U.S. House of Representatives Committee on Oversight and
Reform, (Oct. 25, 2022). ``Barriers to Birth Control: An Analysis of
Contraceptive Coverage and Costs for Patients with Private
Insurance,'' available at https://oversightdemocrats.house.gov/sites/evo-subsites/democrats-oversight.house.gov/files/2022-10-25.COR%20PBM-Insurer%20Report.pdf.
\74\ See FAQs Part XXVI, Q3 (May 11, 2015), available at https:/
/www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/
resource-center/faqs/aca-part-xxvi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/aca_implementation_faqs26.pdf; FAQs Part 31, Q2 (Apr. 20, 2016),
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-31.pdf and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/downloads/faqs-31_final-4-20-16.pdf. See also FAQs Part XII, Q14 (Feb. 20, 2013),
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xii.pdf and
www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs12.html; FAQs Part 51, Q8-9 (Jan. 10, 2022),
available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-51.pdf and https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/FAQs-Part-51.pdf; FAQs Part 54, Q9, (July 28, 2022), available at
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf; FAQs Part 64 (Jan. 22,
2024) available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-64 and https://www.cms.gov/files/document/faqs-part-64.pdf.
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While prior guidance has generally focused on the use of an
exceptions process in the context of coverage of contraceptive
services, it has not been limited to that context. For example, the
Departments' guidance with respect to coverage of PrEP to prevent HIV
acquisition has similarly stated that where a plan or issuer uses
reasonable medical management techniques--such as covering a generic
version of PrEP without cost sharing and imposing cost sharing on an
equivalent branded version--a plan or issuer must have an easily
accessible, transparent, and sufficiently expedient exceptions process
that is not unduly burdensome on the individual or a provider (or other
individual acting as an authorized representative) that waives
otherwise applicable cost sharing for the particular PrEP medication
(generic or branded) for any individual for whom the plan's or issuer's
preferred medication ``would be medically inappropriate, as determined
by the individual's health care provider.'' \75\
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\75\ See FAQs Part 47, introduction to Q3 (July 19, 2021),
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-47.pdf and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/downloads/faqs-part-47.pdf (``[T]he Departments have clarified in previous guidance
that plans and issuers must accommodate any individual for whom a
particular medication (generic or brand name) would be medically
inappropriate, as determined by the individual's health care
provider, by having a mechanism for waiving the otherwise applicable
cost sharing for the brand or non-preferred brand version. If
utilizing reasonable medical management techniques, plans and
issuers must have an easily accessible, transparent, and
sufficiently expedient exceptions process that is not unduly
burdensome.'')
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Therefore, the Departments propose to reorganize and amend 26 CFR
54.9815-2713(a)(4), 29 CFR 2590.715-2713(a)(4), and 45 CFR
147.130(a)(4) by adding a new paragraph (a)(4)(i) to include existing
language with minor technical edits for clarity and to add a new
paragraph (a)(4)(ii) to specify that, in order for a plan's or issuer's
medical management techniques with respect to a recommended preventive
service to be considered reasonable, the plan or issuer would be
required to have an
[[Page 85760]]
easily accessible, transparent, and sufficiently expedient exceptions
process that is not unduly burdensome on a participant, beneficiary, or
enrollee or attending provider \76\ (or other person acting as the
individual's authorized representative). Under this proposal, an
exceptions process would be required to ensure that an individual can
receive coverage, without cost-sharing requirements, for a recommended
preventive service according to the frequency, method, treatment, or
setting that is medically necessary with respect to the individual, as
determined by the individual's attending provider. For example, a plan
or issuer may typically provide coverage without cost sharing for only
a generic version of a recommended preventive service; an individual
who experiences side effects from the covered generic version and whose
attending provider has determined that the brand-name version of the
recommended preventive services is medically necessary for the
individual would be able to use the exceptions process to obtain the
brand-name version without cost sharing, even though the plan or issuer
typically does not provide coverage for the brand-name version (or
provides coverage with cost sharing) This proposed change is necessary
to effectuate the statutory requirement under PHS Act section 2713 that
plans and issuers provide coverage of recommended preventive services
without cost sharing, because without such an exceptions process, a
plan's or issuer's medical management techniques could have the effect
of preventing an individual from receiving coverage without cost
sharing of medically necessary recommended preventive services.
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\76\ For purposes of these proposed rules, consistent with
previous guidance described in section I.B of this preamble, an
attending provider would mean an individual who is licensed under
applicable State law, who is acting within the scope of the
provider's license, and who is directly responsible for providing
care to the patient relating to the recommended preventive services.
Therefore, a plan, issuer, hospital, or managed care organization
would not be an attending provider. The reference to an ``attending
provider'' (rather than simply a ``provider,'' as referenced in
previously issued guidance) is based on the Departments'
understanding that an attending provider is likely to act as an
individual's authorized representative when pursuing an exceptions
process, and for consistency with the requirement that an attending
provider determine medical necessity. See also, fn. 33.
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Under this proposal and consistent with previous guidance, a plan
or issuer would be required to defer to the determination of an
individual's attending provider regarding medical necessity with
respect to the individual. Previously issued guidance has used the
terms ``medically necessary'' and ``medically appropriate''
interchangeably when referring to the appropriate standard for this
clinical determination. However, in these proposed rules, the
Departments propose to use the phrase ``medically necessary'' to
establish uniform terminology and avoid confusion from the use of
different terms.\77\ The Departments have determined that a standard
based on ``medical necessity'' would more accurately comport with the
goal of allowing plans and issuers to use reasonable medical management
techniques to control costs, while ensuring every participant,
beneficiary, and enrollee receives coverage without cost sharing for a
form of a recommended preventive service that is suitable for the
individual.
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\77\ The Departments proposal to use the term and standard of
``medically necessary'' with respect to the exceptions process in
these proposed rules should not be interpreted as changing the
standard or meaning of the Departments' previously published
guidance with respect to the coverage of preventive services.
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These proposed rules use the term ``medically appropriate'' to
refer to a range of potential options that are generally acceptable to
address a condition or achieve a preventive health goal. However, a
preventive service that is medically appropriate for most individuals
(to whom the recommendation or guidelines applies) may not be medically
appropriate to address a condition or achieve a preventive health goal
in the context of other health factors specific to a certain
individual. In these cases, another form of the preventive service
would be medically necessary for that individual. In making a
determination of whether a service is medically necessary, a provider
might consider factors such as severity of side effects, differences in
permanence and reversibility of a recommended preventive service, and
ability to adhere to the appropriate use of the recommended preventive
service, as determined by the attending provider. Under these proposed
rules, if the recommended preventive service covered by the plan or
issuer is not medically appropriate for the individual, as determined
by the individual's attending provider, the plan or issuer would be
required, through the exceptions process, to cover without cost sharing
an alternative recommended preventive service that the individual's
attending provider determines is medically necessary for that
individual.\78\
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\78\ Similarly, if the plan or issuer uses reasonable medical
management techniques to limit the frequency or setting under which
a recommended preventive service is covered without cost sharing and
the individual's attending provider makes a determination that a
different frequency or setting is medically necessary for a
participant, beneficiary, or enrollee, under these proposed rules,
the plan or issuer would be required to provide coverage without
cost sharing for the recommended preventive service according to the
frequency or setting the individual's attending provider determines
to be medically necessary with respect to the individual.
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For example, if a plan typically covers a generic tobacco cessation
product (Gum A) without cost sharing, but an individual is allergic to
an inactive ingredient in Gum A and the individual's attending provider
determines that Gum B is medically necessary for the individual to
achieve the preventive health benefits of the recommended preventive
service without adverse side effects, then the plan or issuer would be
required to provide coverage of Gum B without cost sharing through the
exceptions process. However, if Gum A is medically appropriate for the
individual, the plan would not be required to provide coverage of Gum B
without cost sharing through the exceptions process solely on the basis
that Gum B is also medically appropriate for the individual.
The Departments request comment on the terminology used in the
context of the exceptions process. The Departments also request comment
generally on any operational or technical barriers to implementing the
proposed requirement that plans and issuers defer to the attending
provider's determination of medical necessity using an exceptions
process for recommended preventive services separate from the required
internal claims and appeals process,\79\ and what additional guidance
or requirements would support implementation of this requirement (for
example, with respect to documentation of the determination or
communication with the individual or their attending provider or other
representative regarding a request for a coverage exception).
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\79\ See section 2719 of the PHS Act (42 U.S.C. 300gg-19); 26
CFR 54.9815-2719; 29 CFR 2590.715-2719; and 45 CFR 147.136.
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Consistent with prior guidance, the Departments would determine
whether a plan's or issuer's exceptions process is easily accessible,
transparent, sufficiently expedient, and not unduly burdensome based on
all relevant facts and circumstances, including whether and how a plan
or issuer provides notice of the availability of an exceptions process
and what steps an individual or their provider or other authorized
representative is required to
[[Page 85761]]
initiate and complete in order to seek an exception.\80\
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\80\ FAQs Part 54, Q9 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
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For this purpose, the Departments would consider an exceptions
process to be easily accessible if plan documentation includes relevant
information regarding the exceptions process under the plan or
coverage, including how to access the exceptions process without
initiating an appeal pursuant to the plan's or issuer's internal claims
and appeals procedures, the types of reasonable information the plan or
issuer requires as part of a request for an exception, and contact
information for a representative of the plan or issuer who can answer
questions related to the exceptions process. The Departments would also
encourage plans and issuers to make this information available in a
format and manner that is readily accessible, such as electronically
(on a website, for example) and on paper. The Departments request
comment on how plans and issuers could ensure that this information is
readily available and accessible, such as any specific formats,
mechanisms, or other best practices that could promote access to
information about the exceptions process.
The Departments would consider an exceptions process to be
transparent if, at a minimum, the information relevant to the
exceptions process (including, if used, a standard exceptions process
form with instructions) is included and prominently displayed in plan
documents (including in, or along with, the summary plan description
for plans subject to ERISA), and in any other plan materials, including
on the plan's or issuer's website, that describe the terms of the
plan's or issuer's coverage of preventive services. The Departments
request comment on the extent to which plans and issuers currently make
such information available and accessible and to whom (for example, to
prospective and current participants, beneficiaries, and enrollees and
their providers), whether any additional individuals or groups should
have access to this information if this proposal is finalized, and
whether the Departments should finalize more specific standards
regarding transparency or accessibility of information about the
exceptions process in regulation.
The Departments would consider an exceptions process to be
sufficiently expedient if it makes a determination of a claim according
to a timeframe and in a manner that takes into account the nature of
the claim (for example, pre-service or post-service) and the medical
exigencies involved for a claim involving urgent care. The Departments
request comment on appropriate additional standards for an exceptions
process to be considered sufficiently expedient under these proposed
rules. Specifically, the Departments request comment on whether the
regulations should contain specific timeframes, and if so, what
timeframes would be appropriate, as well as whether the regulations
should specify the manner in which plans and issuers should issue a
determination (for example, on paper, electronically, or both).
For example, as the Departments specifically noted in prior
guidance, it would be unduly burdensome on participants, beneficiaries,
and enrollees for a plan or issuer to deny coverage without cost
sharing and require an individual or their authorized representative to
file an appeal under the plan's or issuer's process for appealing
adverse benefit determinations in order to obtain an exception to the
standard contraceptive coverage policy.\81\ Under 26 CFR 54.9815-2719,
29 CFR 2560.503-1, 29 CFR 2590.715-2719, and 45 CFR 147.136, plans and
issuers must render a determination on an internal appeal in no more
than 15 calendar days (in the case of a pre-service claim) or no more
than 30 calendar days (in the case of a post-service claim). Because
most claims for recommended preventive services likely would not meet
the definition of a ``claim involving urgent care,'' \82\ the expedited
timelines that apply to an appeal of a claim involving urgent care
likely would not apply to a claim for a recommended preventive service.
In the absence of a separate exceptions process, an individual could
therefore be required to pursue a standard internal appeals process to
seek coverage of a recommended preventive service, which could result
in a coverage delay of up to 30 calendar days for a post-service claim
or 15 calendar days for a pre-service claim. Such a delay, when
combined with the ability of plans and issuers to use medical
management techniques to limit coverage of recommended preventive
services outside of an exceptions process, is not aligned with the
statutory requirement to provide coverage without cost sharing for all
required preventive services, because many individuals would be
compelled to pay out-of-pocket for the recommended preventive service
determined by their attending provider to be medically necessary or
accept the form of the recommended preventive service covered by the
plan or issuer as a result of medical management techniques, even if it
may cause adverse effects that an alternate form of the recommended
preventive service would not cause.
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\81\ FAQs Part 54, Q10 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf. An adverse benefit determination means an
adverse benefit determination as defined in 29 CFR 2560.503-1, as
well as any rescission of coverage, as described in 45 CFR 147.128
(whether or not, in connection with the rescission, there is an
adverse effect on any particular benefit at that time). See 26 CFR
54.9815-2719, 29 CFR 2560.503-1, 29 CFR 2590.715-2719, and 45 CFR
147.136 for regulations related to internal claims and appeals
processes.
\82\ A ``claim involving urgent care,'' defined at 29 CFR
2560.503-1(m)(1) and adopted at 26 CFR 54.9815-2719(b)(2)(ii)(B), 29
CFR 2590.715-2719(b)(2)(ii)(B), and 45 CFR 147.136(b)(2)(ii)(B), is
``any claim for medical care or treatment with respect to which the
application of the time periods for making non-urgent care
determinations--(A) Could seriously jeopardize the life or health of
the claimant or the ability of the claimant to regain maximum
function, or, (B) In the opinion of a physician with knowledge of
the claimant's medical condition, would subject the claimant to
severe pain that cannot be adequately managed without the care or
treatment that is the subject of the claim.'' Plans and issuers
generally must render determinations regarding claims involving
urgent care as soon as possible, accounting for medical exigencies,
and not later than 72 hours after receipt of the claim by the plan.
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Therefore, a plan or issuer would not have an easily accessible,
transparent, and sufficiently expedient exceptions process that is not
unduly burdensome on the individual (or provider or other person acting
as the individual's authorized representative) under these proposed
rules if the plan or issuer requires participants, beneficiaries, or
enrollees to appeal an adverse benefit determination using the plan's
or issuer's internal claims and appeals process as the means to obtain
an exception. The Departments request comment on whether plans and
issuers should be permitted to require an individual or their
authorized representative to use the existing process for urgent care
claims under 26 CFR 54.9815-2719(b)(2)(ii)(B), 29 CFR 2560.503-
1(b)(2)(ii)(B), and 45 CFR 147.136(b)(2)(ii)(B) (regardless of whether
the recommended preventive service meets the definition of a ``claim
involving urgent care'') to obtain an exception to the standard
preventive services coverage policy. The Departments also request
comment on whether a health plan that is subject to the essential
health benefit (EHB) prescription drug exception process
[[Page 85762]]
standards at 45 CFR 156.122(c) \83\ should be permitted to require an
individual or their authorized representative to use the existing
standard or expedited prescription drug exception request process when
seeking an exception for a recommended preventive service that is a
prescription drug, or all recommended preventive services.
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\83\ Separately from requirements related to appeals of adverse
benefit determinations, HHS regulations at 45 CFR 156.122(c) state
that a health plan does not provide essential health benefits (EHBs)
unless it provides a standard and expedited exceptions process for
prescription drugs through which an enrollee, the enrollee's
designee, or the enrollee's prescribing physician (or other
prescriber) can receive a coverage determination within 72 hours
(for a standard exception) or no later than 24 hours (for an
expedited exception, in the case of exigent circumstances).
---------------------------------------------------------------------------
The Departments previously noted that plans and issuers may develop
a standard exceptions process form with instructions as part of
ensuring that the plan's or issuer's exceptions process is easily
accessible, transparent, sufficiently expedient, and not unduly
burdensome on the individual or provider (or other individual acting as
a patient's authorized representative).\84\ A standardized form that is
not unnecessarily long and that has clear instructions could reduce
burden on individuals or their authorized representative. The proposed
amendments at 26 CFR 54.9815-2713(a)(4)(ii), 29 CFR 2590.715-
2713(a)(4)(ii), and 45 CFR 147.130(a)(4)(ii) would not require that
plans and issuers develop and utilize a standard exceptions process
form. However, the Departments continue to encourage plans and issuers
to make any such standard exceptions process form, whether developed by
a plan or issuer, or the Medicare Part D Coverage Determination form,
readily available, both in paper and electronically (such as on a
website). The Departments request comment on whether the Medicare Part
D Coverage Determination form, or another existing format, would be an
appropriate model for plans and issuers implementing a standardized
exceptions process under these proposed rules. Alternatively, the
Departments request comment on whether it would be beneficial to
interested parties if the Departments developed and made available a
new standard form for an exceptions process, what information should be
included in any such form, and whether use of such a standardized form
should be required or optional. The Departments anticipate that most,
if not all, plans and issuers have an existing exceptions process for
recommended preventive services, or a process for other services that
can be adapted to meet these requirements for recommended preventive
services at minimal cost. The Departments request comment on this
assumption and on all other aspects of this proposal.
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\84\ FAQs Part 54, Q9 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
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2. Coverage of Contraceptive Items
Section 2713(a)(4) of the PHS Act was enacted to ensure that plans
and issuers cover women's preventive health needs. Contraceptive
coverage is an essential component of women's health care, as
recognized by its inclusion in the HRSA-supported Guidelines, in part
because contraception is effective at reducing unintended pregnancies
and associated negative maternal-infant outcomes.\85\ Unintended
pregnancies, which account for approximately 42 percent of pregnancies
annually in the United States, are a major public health
concern.86 87 Coverage requirements that promote equitable
access to medically appropriate contraceptive items and services are an
essential component of high-quality reproductive health care with wide-
ranging social and economic benefits.\88\ Research shows that many
women are not using their contraceptive of choice, for reasons that
include concerns about side effects, cost, lack of availability, or
inability to get a provider appointment.\89\ Coverage that allows
individuals to identify and obtain a medically necessary contraceptive
(accounting for variables such as hormonal properties, side effects,
and delivery mechanisms, among other factors) without cost sharing
could improve quality of life, reduce behaviors such as discontinuing
contraception, and result in more effective use of contraception to
prevent unintended pregnancy.\90\ As noted in the preamble to the 2023
proposed rules, increased contraceptive coverage can improve access to
care, and therefore also help to address racial inequities in
reproductive health care that contribute to lifelong disproportionate
health outcomes for women in underserved communities, including
disparate maternal health outcomes.\91\
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\85\ Nelson, H., Darney, B., Ahrens, K., Burgess, A., Jungbauer,
R., Cantor, A., Atchison, C., Eden, K., Goueth, R., Fu, R. (2002).
``Associations of Unintended Pregnancy With Maternal and Infant
Health Outcomes: A Systematic Review and Meta-analysis,'' JAMA,
available at https://jamanetwork.com/journals/jama/fullarticle/2797874.
\86\ See CDC, ``Reproductive Health, Unintended Pregnancy,''
available at https://www.cdc.gov/reproductive-health/hcp/unintended-pregnancy/index.html.
\87\ See Bradford, K., Costanza, K., Fouladi, F., Hill, T.,
Nguyen, K., and Speer, K., NCSL (2023). ``Supporting Moms' Health in
the Postpartum Period,'' available at https://www.ncsl.org/health/supporting-moms-health-in-the-postpartum-period; Nelson, et al.,
supra fn. 75; Cruz-Bendez[uacute], A., Lovell, G. Roche, B.,
Perkins, M., Blake-Lamb, T., Taveras, E., and Simione M. (2020).
``Psychosocial status and prenatal care of unintended pregnancies
among low-income women,'' BMC Pregnancy and Childbirth, available at
https://bmcpregnancychildbirth.biomedcentral.com/articles/10.1186/s12884-020-03302-2; Blake, S., Kiely, Gard, C., El-Mohandes, A., El-
Khorazaty, M.N. (2007). ``Pregnancy Intentions and Happiness Among
Pregnant Black Women at High Risk for Adverse Infant Health
Outcomes,'' American Journal of Public Health, available at https://doi.org/10.1363/3919407; Finer, L., and Zolna, M. (2014). ``Shifts
in intended and unintended pregnancies in the United States, 2001-
2008,'' American Journal of Public Health, available at https://pubmed.ncbi.nlm.nih.gov/24354819.
\88\ Id., see also Sonfield, A., Hasstedt, K., Kavanaugh, M.,
and Anderson, R., (2013). ``The Social and Economic Benefits of
Women's Ability to Determine Whether and When to Have Children,''
Guttmacher Institute, available at https://www.guttmacher.org/sites/default/files/report_pdf/social-economic-benefits.pdf.
\89\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and
Salganicoff, A., KFF (2022). ``Contraception in the United States: A
Closer Look at Experiences, Preferences, and Coverage,'' available
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings.
\90\ Steinberg, J., Marthey, D., Xie, L., Boudreaux, M. (2021).
``Contraceptive method type and satisfaction, confidence in use, and
switching intentions,'' Contraception, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8286312.
\91\ See 88 FR 7236, 7241 (Feb. 2, 2023), citing Sutton, M. Y.,
Anachebe, N. F., and Skanes H. (2021). ``Racial and Ethnic
Disparities in Reproductive Health Services and Outcomes, 2020,''
Obstetrics and Gynecology, available at https://doi.org/10.1097/AOG.0000000000004224; White House Blueprint for Addressing the
Maternal Health Crisis (2022), available at https://www.whitehouse.gov/wp-content/uploads/2022/06/Maternal-Health-Blueprint.pdf.
---------------------------------------------------------------------------
Additionally, there has been significant activity related to
coverage of contraceptive services and several new developments,
including legal developments, that have affected women's needs
regarding access to affordable contraception since the publication of
the July 2010 interim final rules. The Departments continue to receive
complaints and are aware of other reports documenting plans' and
issuers' failure to provide coverage of the full range of contraceptive
services. Coverage issues leading to lack of access to contraception
were also substantiated in comments received in response to the OTC
Preventive Products RFI. Other developments have included the Dobbs
decision and subsequent State-level restrictions on access to abortion
and emergency contraception, which have made it more challenging for
women in some States to obtain contraception and quality family
planning care, including because health care providers have been forced
to close or chosen to relocate to
[[Page 85763]]
a different State; \92\ Executive Orders related to reproductive health
care; and FDA approval of the first daily OTC oral contraceptive. As a
result, the Departments have determined that it is necessary to propose
amendments to the regulations governing how plans and issuers cover
contraception and, as discussed in section II.B of this preamble, how
they communicate information about this coverage to participants,
beneficiaries, and enrollees.
---------------------------------------------------------------------------
\92\ See, e.g., Murphy, C., Shin, P., Jacobs, F., and Johnson,
K. (2024). ``In States with Abortion Bans, Community Health Center
Patients Face Challenges Getting Reproductive Health Care,''
Commonwealth Fund, available at https://www.commonwealthfund.org/blog/2024/states-abortion-bans-community-health-center-patients-face-challenges-getting; Harper, C., Brown, K., and Arora, K.
(2024). ``Contraceptive Access in the US Post-Dobbs,'' JAMA Internal
Medicine, available at https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2823682; Qato, D., Myerson, R.,
Shooshtari, A., Guadamuz, J., Alexander, G.C., (2024). ``Use of Oral
and Emergency Contraceptives After the US Supreme Court's Dobbs
Decision,'' available at https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2820370.
---------------------------------------------------------------------------
The Departments are interested in minimizing barriers to coverage
and expanding the scope of coverage without cost sharing for all
recommended preventive services, in alignment with section 2713 of the
PHS Act. The Departments also recognize that the proposals described in
this section II.A.2 of this preamble, if finalized, could require
significant changes to current plan and issuer operations. Therefore,
the Departments propose an incremental approach in this rulemaking with
respect to the types of recommended services addressed that is focused
initially on expanding coverage of contraception. This incremental
approach would facilitate implementation for plans, issuers, and other
interested parties and allow the Departments to gather additional
feedback on challenges and benefits of adopting these proposed policies
before considering whether and how to propose similar requirements with
respect to other recommended preventive services. Focusing first on
contraceptive items is appropriate due to ongoing and widely reported
concerns regarding challenges faced by consumers in accessing
contraceptive items and services without cost sharing, as well as
recent developments affecting access to reproductive health care.\93\
---------------------------------------------------------------------------
\93\ See, e.g., Adler, A., Biggs, A.M., Kaller, S., Schroeder,
R., Ralph, L. (2023). ``Changes in the Frequency and Type of
Barriers to Reproductive Health Care from 2017 to 2021,'' JAMA
Network Open, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10087056; Qato, D., Myerson, R., Shooshtari, A.,
Guadamuz, J., Alexander, G.C., (2024). ``Use of Oral and Emergency
Contraceptives After the US Supreme Court's Dobbs Decision,''
available at https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2820370; Harper, C., Brown, K., and Arora, K. (2024).
``Contraceptive Access in the US Post-Dobbs,'' JAMA Internal
Medicine, available at https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2823682; Kavanaugh, M. and
Friedrich-Karnik, A. (2024). ``Has the Fall of Roe changed
contraceptive access and use? New research from four US states
offers critical insights,'' Health Affairs Scholar, available at
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10986283; and American
Academy of Pediatrics, (updated July 2023) ``The Importance of
Access to Contraception--Barriers to accessing contraception'',
available at https://www.aap.org/en/patient-care/adolescent-sexual-health/equitable-access-to-sexual-and-reproductive-health-care-for-all-youth/the-importance-of-access-to-contraception.
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As described in FAQs Part 51, Q9, FAQs Part 54, Q8, and sections
I.B and II.A.2 of this preamble, the Departments continue to receive
complaints and are aware of other credible reports that some plans and
issuers frequently restrict access to contraceptive items and services
that should be covered without cost sharing. For instance, in addition
to widespread denials of exceptions process requests as described in
section II.A.1 of this preamble, the October 2022 Oversight Committee
report identified at least 34 different contraceptive items that were
commonly excluded from coverage or for which cost-sharing requirements
often were applied.\94\ Additionally, a recent investigation by the
Vermont Department of Financial Regulation, the agency responsible for
regulating issuers in that State, found that three issuers in Vermont
violated State and Federal law by failing to provide coverage of
contraceptive services without cost sharing. The investigation found
that between 2017 and 2021, the issuers inappropriately charged
patients $1.5 million for contraceptive items and services that should
have been provided free of any out-of-pocket costs, resulting in a
finding that 9,000 people were entitled to receive restitution for cost
sharing that was incorrectly applied for contraceptive services.\95\
The investigation prompted a Congressional request to the Government
Accountability Office for an investigation into plan and issuer
compliance with ACA requirements to cover contraceptive items without
cost sharing.\96\ In addition, the Centers for Medicare & Medicaid
Services, as part of targeted market conduct examinations conducted on
behalf of HHS, has identified multiple violations of the requirements
of section 2713(a)(1) of the PHS Act and implementing regulations
related to contraceptive coverage and continues to investigate
additional complaints alleging violations.\97\ Additional reports of
noncompliance documented by members of Congress, advocacy
organizations, and media reports were cited by the Secretaries in their
June 27, 2022 letter to group health plan sponsors and issuers.\98\
Given these reported instances of continued obstacles for women in
accessing contraception, and within the context of several States'
efforts to restrict access to reproductive health care following the
Dobbs decision, the Departments have determined it is appropriate for
these proposed rules to begin with addressing barriers to contraceptive
services.
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\94\ U.S. House of Representatives Committee on Oversight and
Reform, ``Barriers to Birth Control: An Analysis of Contraceptive
Coverage and Costs for Patients with Private Insurance'' (Oct. 25,
2022), available at https://oversightdemocrats.house.gov/sites/evo-subsites/democrats-oversight.house.gov/files/2022-10-25.COR%20PBM-Insurer%20Report.pdf.
\95\ State of Vermont Department of Financial Regulation (Nov.
13, 2023). ``Contraceptive Services Claims Restitution
Information,'' available at https://dfr.vermont.gov/contraceptive-services-claims-restitution-information.
\96\ Sen. Bernie Sanders (June 17, 2024). Letter to Hon. Gene
Dodaro, Comptroller General of the United States, available at
https://www.documentcloud.org/documents/24764790-61724-gao-aca-contraception-coverage-letter.
\97\ CMS, ``Compliance and Enforcement, Federal Market Conduct
Examination Final Reports,'' available at https://www.cms.gov/marketplace/private-health-insurance/consumer-protections-enforcement.
\98\ See, e.g., Secretaries Becerra, Yellen, and Walsh (June 27,
2022). Letter on the ACA contraceptive coverage requirement,
available at https://www.dol.gov/sites/dolgov/files/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/letter-from-secretaries-becerra-yellen-and-walsh-on-the-aca-contraceptive-coverage-requirement.pdf (highlighting reports of
noncompliance documented by Members of the U.S. House of
Representatives (in 2021 and 2022) and the U.S. Senate (in 2021 and
2022), the National Women's Law Center, other nonprofit
organizations, and media reports).
---------------------------------------------------------------------------
Furthermore, focusing on contraception is consistent with recent
Executive Orders. As described in section I.C of this preamble,
President Biden issued E.O. 14101, which directed the Secretaries to
consider actions that would, to the greatest extent permitted by law,
ensure coverage of comprehensive contraceptive care, including all
contraceptives approved, cleared, or granted by the FDA, without cost
sharing for participants, beneficiaries, and enrollees; and streamline
the process for patients and health care providers to request coverage,
without cost sharing, of medically necessary contraception. Further,
section 2(b) of E.O. 14101 instructed the Secretaries to consider
actions that would promote increased access to affordable OTC
[[Page 85764]]
contraception.\99\ Consistent with E.O. 14101, and in consideration of
the availability of OTC oral contraceptives, these proposed rules would
promote coverage and streamline access to all medically necessary
contraception, including the newly FDA-approved OTC daily oral
contraceptive, by removing prescription and cost barriers for
consumers.
---------------------------------------------------------------------------
\99\ 88 FR 41815 at 41816 (June 23, 2023).
---------------------------------------------------------------------------
The Departments acknowledge the possibility that increasing
coverage without cost sharing for recommended preventive services, as
discussed in this section II.A.2 of this preamble, could lead to
greater demand for those services and potentially higher prices charged
by providers. These increased costs could result in higher costs to
consumers, both in the form of higher premiums for people with
insurance and in the form of higher out-of-pocket costs for people who
do not use insurance coverage to obtain OTC contraceptive products. The
potential increases in cost further justify the incremental approach
taken in these proposed rules. In addition, comments in response to the
OTC Preventive Products RFI suggested that requiring coverage of all
OTC preventive products may be challenging for some types of preventive
care. For these reasons, the Departments propose to amend the
preventive services regulations with respect to only contraceptive
items \100\ at this time by inserting a new paragraph (a)(6) at 26 CFR
54.9815-2713, 29 CFR 2590.715-2713, and 45 CFR 147.130. The
Departments' issuance of these proposals implementing section 2713 of
the PHS Act is authorized by section 9833 of the Code, section 734 of
ERISA, and section 2792 of the PHS Act.
---------------------------------------------------------------------------
\100\ See section II.A.2 of the preamble to these proposed rules
for comment solicitation regarding whether to expand the proposed
coverage requirements to other recommended preventive services.
---------------------------------------------------------------------------
First, the Departments propose to define the terms ``drug-led
combination product'' \101\ in proposed new paragraph (a)(6)(i)(A) and
``therapeutic equivalent'' in proposed new paragraph (a)(6)(i)(B) for
purposes of the proposed new paragraph (a)(6). Second, the Departments
propose in proposed new paragraph (a)(6)(ii) to require that plans and
issuers cover, without requiring a prescription and without imposing
cost-sharing requirements, recommended contraceptive items that are
available OTC and for which the applicable recommendation or guideline
does not require a prescription. Third, the Departments propose in
proposed new paragraph (a)(6)(iii) that, in order for medical
management techniques to be considered reasonable, plans and issuers
would be required to utilize a therapeutic equivalence approach for
recommended contraceptive drugs and drug-led combination products.
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\101\ The Departments are proposing to define the term ``drug-
led combination products'' in these proposed rules instead of the
term ``drug-led devices'' used in FAQs Part 64 to align these
proposed rules with existing definitions at 21 CFR 3.2(e). The
change in terminology should not be interpreted to suggest that the
terms are interchangeable, as the term ``drug-led combination
products'' encompasses ``drug-led devices'' as well as other drug-
led combination products for which the FDA evaluates therapeutic
equivalence.
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The Departments request comment on whether to finalize these
policies only with respect to contraception as proposed, or to instead
finalize these policies with respect to all preventive services, or
with respect to a larger subset of preventive services. In particular,
the Departments request comment on issues related to coverage of
additional specific OTC preventive products without a prescription (for
example, tobacco cessation items) in addition to OTC contraceptive
items, or all OTC preventive products without a prescription. The
Departments also request comment on the experiences (particularly with
respect to administrative challenges, consumer experiences, and costs)
of any plans and issuers that currently provide coverage for any OTC
preventive products without requiring a prescription, and how those
experiences could inform the implementation of these proposed rules, if
finalized. The Departments further request comment on whether and to
what extent these proposals could affect the ability of plans and
issuers to negotiate or otherwise limit costs for contraceptive items,
including OTC contraceptive items and contraceptive drugs and drug-led
combination products, and what additional rulemaking or guidance would
be necessary to ensure that plans and issuers retain the ability to do
so.
Along with the incremental approach proposed in this rulemaking
focused on contraception, the Departments anticipate issuing another
notice of proposed rulemaking in the near future to address additional
issues related to coverage of preventive services more generally.
a. Coverage of OTC Contraceptive Items Without Cost Sharing
As discussed in section I.B of this preamble, the Departments'
previously issued guidance provides that preventive health care items
generally available OTC to patients (such as folic acid and certain
contraceptive products, including contraceptive sponges, spermicides,
and emergency contraception (levonorgestrel)) must be covered without
cost sharing under section 2713 of the PHS Act only when prescribed by
a health care provider.\102\ This approach reflected the traditional
role of health coverage in providing benefits for health care items and
services for which there is provider involvement. However, the FDA's
approval of a daily OTC oral contraceptive without a prescription, in
combination with the reasons outlined earlier in this preamble, have
prompted the Departments to revisit this approach. As commenters to the
OTC Preventive Products RFI noted, neither section 2713 of the PHS Act
and its implementing regulations nor the current HRSA-supported
Guidelines require a prescription as a condition of coverage without
cost sharing for recommended preventive services that are available
OTC, except to the extent a particular recommendation or guideline
requires that an individual is prescribed an item or service.
Therefore, with respect to contraceptive items that can be lawfully
obtained \103\ by a participant, beneficiary, or enrollee without a
prescription and for which the applicable recommendation or guideline
does not require a prescription, the Departments propose in new
paragraph (a)(6)(ii) that a plan or issuer would not be considered to
comply with 26 CFR 54.9815-2713(a)(1), 29 CFR 2590.715-2713(a)(1), and
45 CFR 147.130(a)(1), unless the plan or issuer provides coverage for
the contraceptive item without requiring a prescription and without
imposing any cost-sharing requirements. As noted by many commenters to
the OTC Preventive Products RFI, out-of-pocket costs and prescription
requirements make it more difficult for women to access contraception,
including contraceptive items that are available without a
prescription, such as oral contraceptives recently approved by the FDA
for OTC sale. The Departments agree with commenters that these
[[Page 85765]]
obstacles present greater challenges to women in underserved
communities, including those with lower incomes and who are members of
underserved racial and ethnic groups, reinforcing structural barriers
to health care and contributing to reproductive health disparities.
Although some plans and issuers have voluntarily, or as required by
State law,\104\ provided coverage of OTC contraceptive items without a
prescription and without cost-sharing requirements or with limits on
cost sharing, the Departments understand that many women lack such
coverage. In response to a specific question regarding how commonly
plans and issuers provide coverage for OTC preventive products without
requiring a prescription, many commenters asserted that most plans and
issuers cover OTC preventive products only when they are prescribed.
The Departments have determined, therefore, that requiring (rather than
encouraging) coverage of OTC contraceptive items without cost sharing
and without a prescription, as proposed in these rules, is critical to
ensuring that coverage requirements provide women with access to
contraceptives as required under section 2713 of the PHS Act and the
applicable HRSA-supported Guidelines, and to realizing the goal of
promoting access to reproductive health care.
---------------------------------------------------------------------------
\102\ See FAQs Part XII, Q4 and Q15 (Feb. 20, 2013), available
at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xii.pdf and www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs12.html;
FAQs Part 54, Q5-6 (July 28, 2022), available at https://
www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/
resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
\103\ The Departments intend for this proposal to apply only to
contraceptive items that are legally sold without a prescription.
Nothing in this proposal would require a plan or issuer to provide
coverage without cost sharing for a contraceptive item for which the
FDA requires a prescription, if a participant, beneficiary, or
enrollee acquires the item without a prescription.
\104\ CA, CO, MD, NM, NJ, NY, and WA require some coverage of
OTC contraceptive items. See KFF (Updated March 2024). ``State
Private Insurance Coverage Requirements for OTC Contraception
Without a Prescription,'' available at https://www.kff.org/other/state-indicator/state-private-insurance-coverage-requirements-for-otc-contraception-without-a-prescription. See, e.g., Cal. Health &
Saf. Code section 1367.25(b)(1)(A) (barring prescription
requirements for OTC FDA-approved contraceptive drugs, devices, and
products and requiring point-of-sale coverage of OTC contraception
at in-network pharmacies); Md. Code, Ins. section 15-826.1
(requiring coverage without a prescription for all FDA-approved
contraceptive drugs available OTC and limiting cost-sharing for OTC
contraceptive drugs to the amount that would apply to the same drug
dispensed under a prescription).
---------------------------------------------------------------------------
Under this proposal, the requirement to cover OTC contraceptive
items would be subject to the specific coverage requirements applicable
to all recommended preventive services in 26 CFR 54.9815-2713, 29 CFR
2590.715-2713, and 45 CFR 147.130. However, the Departments recognize
that the provision and coverage of OTC contraceptive items present
unique issues that plans and issuers may not encounter when covering
other recommended services. Therefore, the following sections of this
preamble discuss how plans and issuers would be expected to comply with
certain existing requirements with respect to coverage of OTC
contraceptive items.\105\
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\105\ The requirements regarding office visits would not be
relevant with respect to coverage of OTC contraceptive items, and
the requirements regarding timing do not raise unique issues with
respect to OTC contraceptive items.
---------------------------------------------------------------------------
(1) In-Network and Out-of-Network Coverage of OTC Contraceptive Items
Under section 2713 of the PHS Act and its implementing regulations
at 26 CFR 54.9815-2713(a)(3)(i) and (ii), 29 CFR 2590.715-2713(a)(3)(i)
and (ii), and 45 CFR 147.130(a)(3)(i) and (ii), a plan or issuer is not
required to provide coverage for recommended preventive services
delivered by an out-of-network provider if the plan or issuer has a
network of providers. Similarly, nothing precludes a plan or issuer
that has a network of providers from imposing cost-sharing requirements
on recommended preventive services delivered by an out-of-network
provider. However, if a plan or issuer does not have a provider in its
network who can provide a recommended preventive service, the plan or
issuer must cover the recommended preventive service, without cost
sharing, when furnished by an out-of-network provider.\106\ Nothing
under section 2713 of the PHS Act nor its implementing regulations
requires a plan or issuer to establish a provider network.
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\106\ See FAQs Part XXII, Q3 (Feb. 20, 2013), available at
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xii.pdf and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/aca_implementation_faqs12.
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The Departments are not proposing to amend these requirements with
respect to OTC contraceptive items. Therefore, a plan or issuer that
has a network of providers that can provide OTC contraceptive items
would not be required to provide coverage, or waive cost sharing, for
OTC contraceptive items that are provided by an out-of-network
provider. For example, if a plan or issuer has a network of pharmacies
(including mail-order pharmacies) that can provide OTC contraceptive
items without a prescription, the plan or issuer would not be required
to provide coverage (nor waive cost sharing) if a participant,
beneficiary, or enrollee obtains a covered OTC contraceptive item at an
out-of-network pharmacy or other retailer.\107\
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\107\ Nothing in the statute or preventive services regulations
prevents a plan or issuer from providing coverage without cost
sharing for out-of-network recommended preventive services, and the
Departments encourage plans and issuers to do so.
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The Departments understand, based on responses to the OTC
Preventive Products RFI and communications with plans and issuers
regarding coverage of OTC COVID-19 diagnostic tests during and after
the COVID-19 PHE, that network contracts between plans and issuers and
pharmacies that are located in a retail store typically include only
the pharmacies as the in-network providers. The retail stores at which
the pharmacies are located are treated as separate entities. In these
cases, the pharmacy point of sale would be considered an in-network
provider at which an OTC contraceptive would be covered without cost
sharing, but a non-pharmacy point of sale (for example, a cash
register, self-check-out, or vending machine in the front of a retail
store, unaffiliated with the pharmacy department) would not be
considered an in-network provider. Although participants,
beneficiaries, and enrollees would typically be able to purchase OTC
contraceptives from the front of the retail store, these proposed rules
would not require a plan or issuer with a network of pharmacies to also
cover without cost sharing OTC contraceptive items that are purchased
at a retail store that is co-located with an in-network pharmacy. If
the plan or issuer has a network of pharmacies that provide coverage
for OTC contraceptive items without cost sharing, that plan or issuer
would be considered to have a network of providers to provide benefits
for OTC contraceptive items and therefore would not be required to
cover OTC contraceptive items purchased at a retail store that is not
part of its network. For example, emergency contraception could be
available in multiple locations in the same retail store: behind the
pharmacy counter through an in-network pharmacy where a consumer
typically provides health coverage information to allow the pharmacy to
process a claim for coverage; and ``off the shelf'' in a non-pharmacy
section of the same store. This could result in a participant,
beneficiary, or enrollee being able to access an OTC contraceptive item
at an in-network pharmacy without paying any out-of-pocket costs at the
pharmacy counter point of sale, while being liable for the full cost of
the identical OTC contraceptive item if it was purchased at a non-
pharmacy point of sale. The Departments request comment on the
potential impact on consumers, pharmacies, and retail stores with this
proposed approach.
The Departments would expect that in-network coverage for OTC
contraceptive items and services would be provided in a manner that is
comparable to coverage for other recommended preventive services. For
example, the Departments would expect
[[Page 85766]]
that a plan or issuer that does not preference the use of a mail-order
pharmacy for coverage of prescription-only recommended preventive
services would not preference the use of a mail-order pharmacy for
coverage of OTC contraceptives. As another example, a plan or issuer
should not impose shipping costs on an OTC contraceptive item that is
furnished via mail order if the plan or issuer would not impose
shipping costs on a comparable prescription product. Likewise, to the
extent that a plan or issuer generally covers a recommended preventive
service that requires a prescription without cost sharing at the in-
network pharmacy point of sale, without requiring consumers to pursue
post-purchase reimbursement, the Departments would expect that the plan
or issuer would generally cover OTC contraceptive items at the in-
network pharmacy point of sale in the same manner. Plans and issuers
that require participants, beneficiaries, or enrollees to present
information, such as an insurance card, to allow an in-network pharmacy
to process a claim for a prescription-only recommended preventive
service may require similar information to process a claim for an OTC
contraceptive item. The Departments request comment on the appropriate
approach for coverage in a scenario in which a plan's or issuer's
preferred OTC contraceptive item is out of stock at an in-network
pharmacy, while a non-preferred version is available. Specifically, the
Departments request comment on whether plans or issuers should be
required to cover the non-preferred version without cost-sharing
requirements at the in-network pharmacy, without requiring the consumer
to pursue an exceptions process when a preferred version is unavailable
at an in-network pharmacy. The Departments also request comment on
whether and how plans and issuers should document the unavailability of
a preferred OTC contraceptive for coverage purposes.
As noted earlier, plans and issuers are not required to establish a
provider network in order to provide coverage of recommended preventive
services and would not be required to contract with providers for the
purpose of providing in-network coverage of OTC contraceptive items if
these proposed rules are finalized. Under 26 CFR 54.9815-
2713(a)(3)(ii), 29 CFR 2590.715-2713(a)(3)(ii), and 45 CFR
147.130(a)(3)(ii), a plan or issuer that lacks an in-network provider
who can provide an OTC contraceptive item would be obligated to cover
the OTC contraceptive item when provided by an out-of-network provider
without imposing cost sharing.
In the absence of a provider network, the Departments encourage
plans and issuers to establish processes to ensure that participants,
beneficiaries, and enrollees can obtain OTC contraceptive items from
out-of-network providers without incurring out-of-pocket costs and
without encountering significant barriers to access.\108\ The
Departments are not proposing to specify in these proposed rules how a
plan or issuer would do so, but would encourage plans and issuers to
establish a robust approach with multiple entry points to ensure that
participants, beneficiaries, and enrollees can access out-of-network
OTC contraceptive items with no out-of-pocket costs and without
friction at the point of sale. The Departments request comment on what
additional standards or guidance would be helpful to ensure that
participants, beneficiaries, and enrollees can use their health
coverage to access OTC contraceptive items from out-of-network
providers without cost sharing, while allowing plans and issuers
flexibility to effectively implement the requirement to cover OTC
contraceptive items, if finalized.
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\108\ The Departments note that plans and issuers would not be
required to reimburse the cost of OTC contraceptive items that have
already been reimbursed by an account-based plan, such as a health
flexible spending arrangement (FSA) or health reimbursement
arrangement (HRA). As of January 2020, section 3702 of the CARES Act
amended the definition of qualifying medical expenses so that the
expenses for certain OTC medications purchased without a
prescription are eligible for reimbursement under certain
arrangements, such as health savings accounts (HSAs), HRAs, and
health FSAs. An individual generally may not submit claims to
multiple sources of coverage to be reimbursed more than once for the
same medical expense. Therefore, the cost (or the portion of the
cost) of OTC contraception that has already been paid or reimbursed
by a plan or issuer cannot also be reimbursed by an HSA, HRA, or
health FSA.
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If these requirements are finalized, plans and issuers should
ensure that processes that require participants, beneficiaries, or
enrollees to pay out-of-pocket for OTC contraceptive items and pursue
reimbursement do not present unreasonable barriers to accessing OTC
contraceptive items provided by either an in-network or out-of-network
provider. A traditional post-purchase reimbursement process might
require consumers to bear the upfront cost of an OTC contraceptive item
as well as the administrative burden of requesting reimbursement,
providing documentation either on paper or electronically, and
absorbing the financial impact of a delayed reimbursement while a
reimbursement request is being reviewed and processed by the plan or
issuer. For example, while it would be reasonable for a plan or issuer
to require a form and receipt or other proof of purchase, post-purchase
reimbursement programs that require an individual to submit multiple
documents or involve numerous steps that unduly delay an individual's
reimbursement for an OTC contraceptive item would not be reasonable
under these proposed rules.
Further, the Departments would strongly encourage plans and issuers
to consider implementing additional methods for providing coverage of
OTC contraceptive items without cost sharing, in addition to or in lieu
of a traditional post-purchase reimbursement process. For example,
plans and issuers could consider providing access to pre-paid accounts
that are programmed to cover upfront costs associated with OTC
contraceptive items at the point of sale, either by issuing physical
debit or credit cards or providing access to a linked smartphone
application or QR code to participants, beneficiaries, or enrollees,
provided funds were sufficient to cover costs associated with OTC
contraceptive items, the mechanism for delivery was programmed with
sufficient guardrails to prevent funds from being applied to items that
were not covered, and the method of access was otherwise implemented
consistent with applicable law. Subject to the requirements for
utilizing reasonable medical management techniques \109\ and consistent
with previously issued guidance \110\ (including providing access to an
easily accessible, transparent, and sufficiently expedient exceptions
process that is not unduly burdensome on the individual, a provider, or
other authorized representative),\111\ plans and issuers would be able
to utilize reasonable medical management techniques to contain costs
and promote efficient delivery of care, and could consider how to do so
within the
[[Page 85767]]
context of such an approach for out-of-network coverage of OTC
contraceptive items. For example, a plan or issuer would be able to
program a debit or credit card or linked account to limit reimbursement
to a set amount within a specified period of time, provided such
limitations do not unreasonably limit coverage of covered OTC
contraceptive items.
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\109\ 26 CFR 54.9815-2713(a)(4), 29 CFR 2590.715-2713(a)(4), and
45 CFR 147.130(a)(4).
\110\ See, e.g., FAQs Part XII, Q14 (Feb. 20, 2013), available
at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xii.pdf and www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs12.html;
FAQs Part XXVI (May 11, 2015), available at https://www.dol.gov/
sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/
faqs/aca-part-xxvi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/aca_implementation_faqs26.pdf.
\111\ See section II.A of the preamble to these proposed rules
for a description of existing guidance regarding the use of an
exceptions process and the proposal in these proposed rules to
require plans and issuers to provide an exceptions process when
utilizing reasonable medical management for recommended preventive
services.
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The Departments are aware that some OTC contraceptive items, such
as software applications granted marketing authorization by the FDA for
use as contraception, are typically not furnished by in-network
providers (for example, because consumers purchase them directly from a
manufacturer or vendor website). As with other recommended preventive
services for which a plan or issuer does not have an in-network
provider who can provide the item or service, the plan or issuer would
be required to cover the item or service when delivered by an out-of-
network provider and could not impose cost sharing with respect to the
item or service. The Departments request comment on whether additional
guidance is necessary to ensure that individuals would be able to use
their health coverage to obtain OTC contraceptive items that are
typically obtained outside of the traditional system of network
providers with zero cost sharing and without unnecessarily burdensome
reimbursement requirements, while permitting plans and issuers to
utilize reasonable medical management techniques.
The Departments request comment on how plans and issuers would
likely operationalize out-of-network coverage and whether the
Departments should adopt specific standards for out-of-network coverage
with respect to OTC contraceptive items. In addition, participants,
beneficiaries, and enrollees would benefit if plans and issuers provide
access to a broad network of providers with the capacity to provide the
full range of OTC contraceptive items, and the Departments request
comment on how to support and incentivize plans and issuers to develop
such networks.
(2) Reasonable Medical Management Techniques for OTC Contraceptive
Services
As discussed in section II.A.1 of this preamble, to the extent not
specified in the applicable recommendation or guideline, plans and
issuers may rely on the relevant clinical evidence base and established
reasonable medical management techniques to determine the frequency,
method, treatment, or setting for coverage of a recommended preventive
health service.\112\ In prior guidance, the Departments have stated
that if a plan or issuer utilizes medical management techniques within
a specified category of contraception (or, with respect to
contraceptive categories not specifically described in the HRSA-
supported Guidelines, a group of substantially similar services or
products), the use of those techniques will not be considered
reasonable unless the plan or issuer has an easily accessible,
transparent, and sufficiently expedient exceptions process that is not
unduly burdensome on the individual or their attending provider (or
other individual acting as the individual's authorized representative)
allowing such individual to obtain coverage for a service or FDA-
approved, -cleared, or -granted product determined to be medically
necessary, as determined by the individual's attending provider.\113\
The Departments are not proposing amendments to the medical management
provisions specific to OTC contraceptive items. Therefore, these
standards, as well as the new standards proposed in these rules,\114\
would apply to a plan's or issuer's use of medical management
techniques with respect to OTC contraceptive items in the same manner
and to the same extent as they would apply to other recommended
preventive services.
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\112\ 26 CFR 54.9815-2713(a)(4); 29 CFR 2590.715-2713(a)(4); and
45 CFR 147.130(a)(4).
\113\ See FAQs Part 54, Q3 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf.
\114\ See sections II.A.1 (for discussion of proposal to amend
the general requirements related to reasonable medical management)
and II.A.2.b (for discussion of proposed amendment regarding
reasonable medical management for contraceptive drugs and drug-led
combination products, including OTC contraceptive items) of the
preamble to these proposed rules.
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The Departments recognize that plans and issuers may encounter
unique issues related to medical management if the Departments finalize
the proposed requirements to cover OTC contraceptive items. In the OTC
Preventive Products RFI, the Departments requested comment on what
types of reasonable medical management techniques plans and issuers
would consider implementing if recommended OTC preventive products were
required to be covered without cost sharing. In response, some
commenters suggested plans and issuers could limit the number of
products an individual could obtain during a given period as a
guardrail for OTC contraceptive services. One commenter stated that
quantity limits would help prevent inequitable distribution and
stockpiling for resale of OTC contraceptive services. Another commenter
urged the Departments to allow plans and issuers to limit the initial
purchase of OTC contraceptive services until there is more
understanding of the cost implications and distribution channels for
OTC preventive services. Other commenters discouraged the use of
quantity limits as a medical management technique out of concern that
such limits would discourage continuation of use, by creating new
access barriers for individuals that already face challenges engaging
with the health care system, in particular individuals that are members
of underserved communities. In addition, a commenter expressed concern
about the difficulty in predicting the need for emergency
contraception.
Some commenters advocated for 12-month quantity limits for monthly
OTC contraceptive services in order to balance the health equity
concerns of individuals with the implementation challenges that may
arise for retailers and plans and issuers transitioning to covering OTC
contraceptive services without a prescription and without cost sharing.
Some commenters noted that there is already ample precedent for
requiring coverage of extended supplies of contraceptives, with at
least 25 States and the District of Columbia requiring Medicaid and
private payers to cover the dispensing of an extended (usually 12-
month) supply of prescription contraceptives.\115\ One commenter to the
OTC Preventive Products RFI stated that purchasing contraceptive items
in larger dispensing quantities may create opportunities for plans and
issuers to negotiate pricing discounts that will decrease per-unit
costs for plans and issuers as well as suppliers and distributors. The
Departments note that when the OTC oral contraceptive became available
in March 2024 for sale online and in stores under the brand name
Opill[supreg], the manufacturer's suggested retail price for a 6-month
supply was cheaper (per-month) than
[[Page 85768]]
the manufacturer's suggested retail price for a 1-month supply.\116\
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\115\ In States that have implemented a 12-month prescription
limitation, plans and issuers are required to cover without cost
sharing a supply of up to 12 months when indicated by the
prescribing provider. See Power to Decide (August 2023), ``Coverage
for an Extended Supply of Contraception,'' available at https://powertodecide.org/sites/default/files/2023-08/Extended%20Supply%20of%20Contraception.pdf. Since the comment
submission period for the OTC Preventive Products RFI closed,
additional States have enacted coverage requirements related to
extended contraceptive supplies. See NCSL, ``State Contraception
Policies,'' available at https://www.ncsl.org/health/state-contraception-policies.
\116\ Lupkin, S., NPR (March 18, 2024). ``First over-the-counter
birth control pill now for sale online,'' available at https://npr.org/sections/health-shots/2024/03/04/1235404522/opill-over-counter-birth-control-pill-contraceptive-shop.
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Literature on contraception shows that dispensing a multi-month
supply of prescription oral contraceptive pills at one time during the
plan year is generally associated with increased continuation of
contraception use, decreased occurrence of unintended pregnancy, and
greater cost savings, but also more pill waste, compared to dispensing
a single month's supply.117 118 Research also shows that
advance provision of emergency contraception significantly increases
its use without adversely affecting the use of routine
contraception,\119\ which suggests that it may be beneficial for women
to receive more than one unit of emergency contraception at a time, in
order to realize the benefits of advance provision for future use.
Limitations on the supply of OTC contraception dispensed at one time
should take into account the clinical evidence base regarding benefits
to consumers, including as described in this section II.a.2.
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\117\ See Steenland, M., Rodriguez, M., Marchbanks, P., and
Curtis, K. (2013). ``How does the number of oral contraceptive pill
packs dispensed or prescribed affect continuation and other measures
of consistent and correct use? A systematic review,'' Contraception,
available at https://www.sciencedirect.com/science/article/pii/S0010782412007317?via%3Dihub.
\118\ See Judge-Golden, C. P., Smith, K. J., Mor, M. K., and
Borrero, S. (2019). ``Financial Implications of 12-Month Dispensing
of Oral Contraceptive Pills in the Veterans Affairs Health Care
System,'' JAMA Internal Medicine, available at https://doi.org/10.1001/jamainternmed2019.1678 (study of the Veterans Affairs health
care system finding that a 12-month supply better supports
continuous usage of contraceptive items than a 3-month supply and
decreases the risk of unwanted pregnancies, and concluding that a
12-month dispensing option would likely result in a $2 million
dollar annual cost-savings for the Veterans Affairs health care
system).
\119\ See Kripke, C. (2000). ``Advance Provision for Emergency
Oral Contraception,'' American Family Physician, available at
https://www.aafp.org/pubs/afp/issues/2007/0901/p654.html; Jackson
R.A., Bimla Schwarz, E., Freedman L, Darney P. (2003). ``Advance
supply of emergency contraception: effect on use and usual
contraception--a randomized trial,'' Obstetrics and Gynecology,
available at https://pubmed.ncbi.nlm.nih.gov/12850599.
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Given the evidence regarding benefits to consumers of a multi-month
supply of prescription oral contraceptive pills, the Departments would
generally not consider coverage limitations that only allow for a 1-
month supply of an OTC oral contraception per instance of dispensing to
be reasonable or consistent with the requirement to cover recommended
preventive services under 26 CFR 54.9815-2713(a)(4), 29 CFR 2590.715-
2713(a)(4), and 45 CFR 147.130(a)(4) if there is no clinical basis for
limiting the quantity to be dispensed at one time. The Departments seek
comment, with respect to all forms of OTC contraceptives, on whether
other quantity limits (such as a 6-month limit on OTC oral
contraception or a 3-unit limit on OTC emergency contraception per
instance of dispensing) should be considered reasonable or
unreasonable, and what additional facts and circumstances should be
considered when determining the reasonableness of a particular quantity
limit with respect to OTC contraception, such as initial success with a
shorter supply of OTC contraception. The Departments also request
comment on the circumstances under which participants, beneficiaries,
and enrollees who receive an initial extended quantity of OTC
contraception could access a different form of contraception without
incurring cost sharing before finishing the initial extended quantity
(for example, before a 6-month supply is exhausted).
Some commenters to the OTC Preventive Products RFI suggested
individuals should be required to submit evidence to a plan or issuer
that a particular form of prescription birth control is inappropriate
before receiving coverage for an OTC contraceptive service. The
Departments previously issued guidance that it is not a reasonable
medical management technique to require individuals to fail first using
numerous other services or FDA-approved, -cleared, or -granted
contraceptive products before the plan or issuer will approve coverage
for the service or FDA-approved, -cleared, or -granted contraceptive
product that is medically necessary for the individual, as determined
by the individual's attending provider.\120\ Within the context of
medical management of OTC contraceptive items, the Departments would
not consider it reasonable either to impose a prescription requirement
for OTC contraception as a form of medical management, including
requiring an individual to fail first using a prescription-only
contraceptive item before providing coverage of an OTC contraceptive
item without cost sharing, or to require an individual to fail first
with numerous prescription or OTC contraceptive items before the plan
or issuer will approve coverage for a medically necessary OTC
contraceptive item.
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\120\ See FAQs Part 54, Q8 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
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Other commenters suggested that a plan or issuer could consider
implementing age-based limitations or gender-based requirements instead
of offering benefits to all individuals with reproductive capacity. The
Departments would not consider age- and gender-based medical management
with respect to OTC contraceptive services to be reasonable unless the
medical management technique relies on a clinical rationale for
limiting access to individuals of a certain age or gender and is
consistent with FDA approvals of any particular OTC contraceptive
product. The Departments have stated in previous guidance that imposing
an age limit on contraceptive coverage instead of providing these
benefits to all women would not be considered a reasonable medical
management technique.\121\
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\121\ Id.
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A commenter suggested that implementing prior authorization
requirements with respect to certain OTC items would not be an
unreasonable medical management technique. However, such medical
management techniques create barriers for consumers accessing
contraceptive services with a prescription \122\ and would create
similar barriers for consumers accessing contraceptives services
without a prescription, with the added challenge that consumers seeking
to obtain OTC contraceptive items are likely navigating such
requirements without the assistance of a provider. Such requirements
could be used as a means of circumventing the requirement to provide
coverage of contraception without cost sharing and without a
prescription. Therefore, under these proposed rules, coverage
requirements that, in practice, operate as substitutes for a
prescription coverage requirement by requiring the involvement of a
provider (such as prior authorization processes that require provider
involvement or other clinical expertise or a requirement that
individuals receive counseling from a pharmacist prior to accessing an
OTC contraceptive item) would not be considered reasonable medical
management techniques with respect to OTC contraceptive items.
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\122\ See U.S. House of Representatives Committee on Oversight
and Reform (Oct. 25, 2022). ``Barriers to Birth Control: An Analysis
of Contraceptive Coverage and Costs for Patients with Private
Insurance,'' available at https://oversightdemocrats.house.gov/sites/evo-subsites/democrats-oversight.house.gov/files/2022-10-25.COR%20PBM-Insurer%20Report.pdf.
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[[Page 85769]]
Under these proposed rules, plans and issuers generally could adopt
medical management techniques with respect to OTC contraceptive items
that are not described as unreasonable in this preamble as long as they
are otherwise consistent with proposed 26 CFR 54.9815-2713(a)(4), 29
CFR 2590.715-2713(a)(4), and 45 CFR 147.130(a)(4) and existing guidance
and the plan or issuer makes available an exceptions process as
described in these proposed rules. The Departments request comment on
what other medical management techniques plans and issuers would
consider applying to OTC contraceptive items, including whether such
techniques should be considered reasonable or unreasonable. The
Departments request comment on the proposed interpretation of
reasonable medical management requirements with respect to OTC
contraceptive items, including whether any final regulations should
specify or use examples to illustrate in the regulatory text the
Departments' interpretation of reasonable medical management for OTC
contraceptive items.
(3) Other Considerations
The Departments acknowledge the concerns raised by commenters to
the OTC Preventive Products RFI, such as risks to patient privacy, of
overconsumption, and of fraud, waste, or abuse, that some commenters
believe could be exacerbated with increased coverage with no cost
sharing of OTC contraceptive items. These concerns could be heightened
with respect to OTC items and services that do not require the input of
a provider in the form of a prescription and may be further increased
within the context of out-of-network providers with whom plans and
issuers do not have contractual relationships. For example, plans and
issuers may wish to ensure that individuals are obtaining OTC
contraceptive items to prevent pregnancy rather than solely to address
another underlying condition (such as to treat anemia or manage
premenstrual symptoms) or to ensure that an individual is obtaining
condoms for the use of a woman covered under the plan, rather than for
use by another individual. Several commenters to the OTC Preventive
Products RFI highlighted concerns that coverage of OTC preventive
products without cost sharing could incentivize overconsumption or
waste of such products. Additionally, OTC contraceptive items may
present particular challenges with respect to patient privacy, given
the deeply personal nature of reproductive health care and the dynamic
nature of State laws governing access to reproductive health care.
The Departments anticipate that plans and issuers with a network of
providers would mitigate these risks by using existing claims
processing systems with respect to in-network coverage, but acknowledge
that coverage through pathways other than an in-network pharmacy may
present privacy challenges (for example, because non-provider retailers
are not required to implement the same privacy and security safeguards
as they are with respect to back-pharmacy transactions). The
Departments request comment on how best to encourage plans and issuers
to develop mechanisms that promote access to OTC contraceptive items in
accordance with these proposed regulations, if finalized, while
protecting patient privacy and allowing plans and issuers to identify
and address risks including waste, fraud, and abuse.
The Departments further request comment on how the proposed
exceptions process requirement should apply with respect to OTC
contraceptives items, for which no provider involvement is generally
required. The proposed exceptions process requirement described in
section II.A.1 of this preamble refers to the determination of an
individual's attending provider. Thus, the Departments request comment
on what information individuals should be required to provide to seek
an exception to access coverage for an OTC contraceptive item that is
not typically covered, including how plans and issuers could determine
whether an OTC contraceptive item is medically necessary, and whether
any additional changes are necessary for an exceptions process when
used to seek coverage, without cost sharing, for an OTC contraceptive
item.
The Departments also request comment on whether it would be
beneficial to define a new term to refer to contraception that would be
subject to the proposed amendments to 26 CFR 54.9815-2713(a)(6), 29 CFR
2590.715-2713(a)(6), and 45 CFR 147.130(a)(6); and if so, request
feedback on the appropriate term and scope of the definition. For
example, the Departments request comment on whether to define
``contraceptive item,'' ``contraceptive product,'' or ``contraceptive
items and services'' within the context of these proposed rules; and
whether the term would refer to all contraceptive items and services
recommended under the HRSA-supported Guidelines, all contraceptive
items and services recommended under 26 CFR 54.9815-2713(a)(1), 29 CFR
2590.715-2713(a)(1), and 45 CFR 147.130(a)(1); or another subset of
recommended preventive services.
b. Therapeutic Equivalence Approach to Reasonable Medical Management
for Contraceptive Drugs and Drug-Led Combination Products
As discussed in section II.A.2 of this preamble, despite repeated
clarification in guidance, the Departments have continued to receive
complaints and reports that participants, beneficiaries, and enrollees
are being denied coverage for contraceptives that their attending
providers have prescribed, in some cases due to the application of
medical management techniques that are not reasonable based on all the
relevant facts and circumstances.\123\ The Departments are also aware
of investigations and other credible reports that have documented plans
and issuers using potentially unreasonable medical management
techniques.\124\ In response to these reports, the Departments issued
FAQs Part 64 on January 22, 2024, which set forth a therapeutic
equivalence approach that plans and issuers can, but are not required
to, use (in combination with an easily accessible, transparent, and
sufficiently expedient exceptions process) to comply with PHS Act
section 2713 and its implementing regulations with respect to FDA-
approved contraceptive drugs and drug-led devices, as an alternative to
standards that had been set forth in previous guidance and described in
section II.A.1 of this preamble.\125\ The Departments have determined
that it is necessary to require the therapeutic equivalence approach to
ensure coverage of the full range of FDA-approved contraceptive items
that are drugs and drug-led combination products. The proposed
therapeutic equivalence approach would serve as a guardrail against the
widespread use of narrow drug formularies, which the Departments
[[Page 85770]]
understand plans and issuers use to limit costs, but can have the
effect of limiting access to medically appropriate contraceptive drugs
and drug-led combination products.\126\ This proposed regulation would
limit the use of such techniques with respect to recommended
contraceptive drugs and drug-led combination products.
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\123\ See also FAQs Part 54, Q8 (July 28, 2022), available at
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
\124\ See U.S. House of Representatives Committee on Oversight
and Reform (Oct. 25, 2022). ``Barriers to Birth Control: An Analysis
of Contraceptive Coverage and Costs for Patients with Private
Insurance,'' available at https://oversightdemocrats.house.gov/sites/evo-subsites/democrats-oversight.house.gov/files/2022-10-25.COR%20PBM-Insurer%20Report.pdf.
\125\ FAQs Part 64 (Jan. 22, 2024), available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-64 and https://www.cms.gov/files/document/faqs-part-64.pdf.
\126\ See Dieguez, G., Sawhney, T., and Mirchandani, H.,
Milliman (2016). ``Evolution of the Use of Restrictions in
Commercial Formularies,'' available at https://www.milliman.com/-/media/milliman/importedfiles/uploadedfiles/insight/2016/evolution-restrictions-commercial-formularies.ashx; Rucker, J., Benfield, M.,
Jenkins, N., Enright, D., Henderson, R., Chambers, J. (2023).
``Commercial Coverage of Specialty Drugs, 2017-2021'' Health Affairs
Scholar, available at https://academic.oup.com/healthaffairsscholar/article/1/2/qxad030/7236995.
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Therefore, the Departments propose to amend 26 CFR 54.9815-2713, 29
CFR 2590.715-2713, and 45 CFR 147.130 to add a new paragraph
(a)(6)(iii) that would specify that a plan's or issuer's medical
management techniques are not considered to be reasonable unless the
plan or issuer provides coverage for recommended preventive services
that are contraceptive drugs and drug-led combination products, other
than those items for which there is at least one therapeutic equivalent
drug or drug-led combination product, as applicable, for which the plan
or issuer provides coverage without imposing any cost-sharing
requirements, consistent with the therapeutic equivalence approach
described in FAQs Part 64. The Departments also propose to define
``therapeutic equivalent'' for purposes of this proposed provision as
having the meaning given the term ``therapeutic equivalents'' in 21 CFR
314.3(b), which defines ``therapeutic equivalents'' as ``approved drug
products that are pharmaceutical equivalents for which bioequivalence
has been demonstrated, and that can be expected to have the same
clinical effect and safety profile when administered to patients under
the conditions specified in the labeling.''
Under this proposal, consistent with FAQs Part 64, a therapeutic
equivalent drug or drug-led combination product would be one that is
designated with a code with the first letter ``A'' in the FDA's
Approved Drug Products with Therapeutic Equivalence Evaluations (Orange
Book).\127\ If the Orange Book does not identify a therapeutic
equivalent for a given drug or drug-led combination product, that drug
or drug-led combination product would have no therapeutic equivalent
for purposes of these proposed rules, and a plan or issuer would not be
permitted to use medical management techniques to deny coverage of (or
impose cost sharing on) that drug or drug-led combination product. For
example, assume that there are six oral contraceptives (Pill A, Pill B,
Pill W, Pill X, Pill Y, and Pill Z) listed in the Orange Book that are
within the HRSA-supported Guidelines category of contraceptives known
as ``oral contraceptives (combined pill).'' If the Orange Book does not
identify a therapeutic equivalent for either Pill A or Pill B, but
identifies the latter four (Pill W, Pill X, Pill Y, and Pill Z) as
therapeutic equivalents of each other, then under these proposed rules,
the plan would be required to cover without cost sharing Pill A and
Pill B, for which there are no therapeutic equivalents. The plan could
utilize reasonable medical management techniques that result in it
covering only one of Pill W, Pill X, Pill Y, or Pill Z without cost
sharing because all four are therapeutically equivalent to each other
(provided the plan has an exceptions process that ensures an individual
can receive coverage, without cost sharing, for any of Pill W, Pill X,
Pill Y, or Pill Z, in the circumstances discussed in more detail in
section II.A.1 of this preamble).
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\127\ FAQs Part 64, Q2 (Jan. 22, 2024), available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-64 and https://www.cms.gov/files/document/faqs-part-64.pdf.
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In the Orange Book, the FDA evaluates only multisource prescription
drug products for therapeutic equivalence.\128\ Therefore, the FDA does
not evaluate therapeutic equivalence for OTC drugs or OTC drug-led
combination products and the Orange Book does not categorize such
products as a ``therapeutic equivalent'' of any other drug or drug-led
combination product. As described in section II.A.2, the Departments
are proposing to require plans and issuers to provide coverage of OTC
contraceptives without cost sharing and without requiring a
prescription. If both the therapeutic equivalence proposal described in
this preamble section and the OTC contraceptive coverage proposal are
finalized, plans and issuers would be required to cover all OTC
contraceptive items that are drugs and drug-led combination products
without cost sharing. The Departments request comment on the potential
impacts to interested parties, including participants, beneficiaries,
and enrollees and plans and issuers, if both proposals are finalized.
The Departments further request comment on whether an alternative
approach to therapeutic equivalence would be appropriate for OTC
contraceptive drugs and drug-led combination products. If so, the
Departments request comment on what medical management techniques would
be appropriate and reasonable while balancing the goals of increasing
consumer access to OTC contraceptive drugs and drug-led combination
products and containing costs. For example, the Departments seek
comment on whether plans and issuers should be permitted to provide
coverage without cost-sharing or prescription requirements of a
preferred generic version of an OTC contraceptive, while only covering
the brand version without cost-sharing or prescription requirements
subject to an exceptions process.
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\128\ FDA, ``Orange Book Preface,'' available at https://www.fda.gov/drugs/development-approval-process-drugs/orange-book-preface.
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In addition to satisfying the therapeutic equivalence approach, the
Departments would not consider a plan's or issuer's medical management
techniques with respect to recommended contraceptive services to be
reasonable unless the plan or issuer meets existing standards under
applicable regulations and guidance, to the extent not superseded by
the other proposals in these proposed rules. For example, as described
in FAQs Part 54, Q8, a plan's or issuer's medical management techniques
would generally be considered reasonable only if the plan or issuer
utilizes reasonable medical management techniques within a specified
category described in the HRSA-supported Guidelines (or group of
substantially similar products that are not included in a specified
category).129 130 Therefore, if a plan or
[[Page 85771]]
issuer provided coverage consistent with the proposed therapeutic
equivalence approach, but used medical management techniques to deny
coverage or impose cost sharing for all contraceptives in another
category (or other groups of substantially similar products), such as
the category for sterilization surgery for women, the plan's or
issuer's medical management techniques would not be considered to be
reasonable. Similarly, consistent with FAQs Part 54, Q8, the
Departments would not consider a plan's or issuer's medical management
techniques to be reasonable if the plan or issuer requires an
individual to fail first using numerous contraceptives within a
category prior to providing coverage consistent with the proposed
therapeutic equivalence approach.
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\129\ FAQs Part 54, Q8 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
\130\ The Departments acknowledge that the proposed therapeutic
equivalence standard would require plans and issuers to cover more
contraceptive drugs and drug-led combination products than under
FAQs Part XXVI, Q2, which specified that a plan or issuer must cover
at least one form of contraception in each method that is identified
by the FDA. The Departments have determined that this approach is
necessary to ensure coverage of the full range FDA-approved
contraceptive drugs and drug-led combination products, as required
under section 2713 of the PHS Act, while still permitting plans and
issuers to contain costs by not requiring plans and issuers to cover
items for which there is at least one therapeutic equivalent drug or
drug-led combination product, as applicable, for which the plan or
issuer provides coverage without imposing any cost-sharing
requirements. The FDA defines ``therapeutic equivalents'' at 21 CFR
314.3(b) as approved drug products that are pharmaceutical
equivalents (meaning, in general, that they contain identical
amounts of the identical active drug ingredient in the identical
dosage form and route of administration) and bioequivalents
(meaning, in general, that the rate and extent of the active
ingredient at the site of action are the same), and that can be
expected to have the same clinical effect and safety profile when
administered to patients under the conditions specified in the
labeling. The contraceptives described in the HRSA-supported
Guidelines do not refer to therapeutic equivalence, and as a result,
there may be multiple drugs or drug-led combination products within
a category that are not therapeutically equivalent to each other.
For example, within the ``oral contraceptives (combined pill)''
category identified in the HRSA-supported Guidelines, there could
exist multiple products that are oral contraceptive combined pills
but are not therapeutically equivalent because, for example, they
contain different amounts of the same active ingredients. Under this
proposal, a plan or issuer would be required to cover, without cost
sharing, at least one oral contraceptive combined pill that has a
therapeutic equivalent, as well as each non-therapeutic equivalent
oral contraceptive combined pill, rather than at least one form of
an oral contraceptive combined pill in the category.
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In addition, consistent with FAQs Part 64, the Departments would
not consider the use of medical management techniques to be reasonable
where a plan or issuer provides coverage consistent with the proposed
therapeutic equivalence approach but fails to provide an exceptions
process that meets the standards proposed in these rules. Requiring
plans and issuers that utilize reasonable medical management to both
apply the therapeutic equivalence approach and provide an exceptions
process would be particularly important in instances where the plan's
or issuer's preferred method is not medically appropriate for an
individual. Consider an example in which there are three products
within the HRSA-supported Guidelines category of ``the contraceptive
patch'' (Patch A, Patch B, and Patch C) and the Orange Book identifies
all three products as therapeutic equivalents to each other. Under the
proposed therapeutic equivalence approach, a plan or issuer would be
permitted to utilize reasonable medical management techniques that
result in it generally covering only one of Patch A, Patch B, or Patch
C without cost sharing because all are therapeutically equivalent to
each other. However, without an exceptions process, a person who, for
example, has an allergy to a non-therapeutic ingredient in Patch A such
as a dye or an adhesive could not access an alternative such as Patch B
or Patch C that is determined to be medically necessary by the
individual's attending provider, and as a result, would be denied the
coverage required under PHS Act section 2713.
The Departments propose to define ``drug-led combination product''
at 26 CFR 54.9815-2713(a)(6)(i)(A), 29 CFR 2590.715-2713(a)(6)(i)(A),
and 45 CFR 147.130(a)(6)(i)(A) as ``a combination product, as defined
under 21 CFR 3.2(e), that comprises a drug and a device, and for which
the drug component provides the primary mode of action.'' The term
``combination products'' refers to the existing FDA definition of
``combination product'' at 21 CFR 3.2(e), and would apply only to drug-
led combination products within the context of the proposed therapeutic
equivalence approach discussed in this section II.A.2.b of this
preamble. While this proposal would not prevent plans and issuers from
applying a therapeutic equivalence approach to other recommended
preventive services, the Departments request comment on whether plans
and issuers utilizing reasonable medical management of recommended
preventive services other than contraceptive drugs and drug-led
combination products should be required to apply the therapeutic
equivalence approach as described in these proposed rules.
B. Communicating OTC Contraceptive Coverage Requirements
Because plans and issuers have not traditionally provided coverage
for health items that can be purchased directly by a consumer without a
prescription, participants, beneficiaries, and enrollees may not be
aware that their health plan or coverage would cover OTC contraceptive
items without cost sharing and without a prescription if these proposed
rules are finalized. The Departments expect that without sufficient
communication about this new coverage requirement from plans and
issuers, consumers' lack of awareness may lead to minimal use of this
benefit. Therefore, these proposed rules propose new requirements under
26 CFR 54.9815-2715A2, 29 CFR 2590.715-2715A2, and 45 CFR 147.211 that
would ensure participants, beneficiaries, and enrollees are informed of
this new coverage.
Section 2715A of the PHS Act provides that non-grandfathered group
health plans and health insurance issuers offering non-grandfathered
group or individual health insurance coverage must comply with section
1311(e)(3) of the ACA. Through section 1311(e)(3)(C) of the ACA,
section 2715A of the PHS Act requires plans and issuers to permit
individuals to learn the amount of cost sharing (including deductibles,
copayments, and coinsurance) associated with a specific item or service
furnished by an in-network provider upon the individual's request.
Under the Departments' rulemaking authority in section 9833 of the
Code, section 734 of ERISA, and 2792 of the PHS Act to implement
section 2715A of the PHS Act, the Departments propose to require that
plans and issuers permit individuals to learn the amount of cost
sharing associated with OTC contraceptive items covered by their plan
or coverage without a prescription. Specifically, the Departments
propose to amend 26 CFR 54.9815-2715A2, 29 CFR 2590.715-2715A2, and 45
CFR 147.211 to add a new paragraph (b)(1)(vi) that would require plans
and issuers to provide information to participants, beneficiaries, and
enrollees explaining that OTC contraceptive items are covered without
cost sharing and without a prescription consistent with these proposed
rules when participants, beneficiaries, and enrollees request cost-
sharing information for any covered contraceptive item or service. By
promoting awareness of coverage of OTC contraceptive items without
cost-sharing or prescription requirements, these proposals serve as
important companions to proposed 26 CFR 54.9815-2713(a)(6), 29 CFR
2590.715-2713(a)(6), and 45 CFR 147.130(a)(6), described in section
II.A.2.a of this preamble.
In accordance with PHS Act section 2715A and ACA section
1311(e)(3)(C), under current 26 CFR 54.9815-2715A2(b), 29 CFR 2590.715-
2715A2(b), and 45 CFR 147.211(b), plans and issuers must disclose an
estimate of the participant's, beneficiary's, or enrollee's cost-
sharing liability for all covered items or services furnished by a
provider or providers, through the Transparency in Coverage internet-
based self-service tool or, if requested by the individual, paper.
Under current rules, if a participant, beneficiary, or enrollee uses
the self-service tool to look up contraceptive items or services with
respect to an in-network pharmacy (or to look up the
[[Page 85772]]
out-of-network cost sharing for these items or services for a plan or
issuer that does not have a provider in its network that can provide
the preventive item), the self-service tool would display the non-zero
dollar cost-sharing liability for the individual that is associated
with being billed as non-preventive (if applicable), along with a
statement that the contraceptive item or service may not be subject to
cost sharing if it is billed as preventive. For contraceptive items
that are only covered by the plan or coverage for preventive purposes
(including because they are only indicated for preventive purposes),
current rules require the self-service tool to reflect a zero-dollar
cost-sharing liability. The Departments note also that some
contraceptive items may be covered for non-preventive purposes (either
with or without a prescription), and in this case the self-service tool
would reflect the non-zero dollar cost-sharing liability. The
Departments also note that under current rules, plans and issuers are
not required to disclose any cost-sharing information through the self-
service tool for non-covered items and services, including with respect
to contraceptive items and services. Nothing in these proposed rules
alters these disclosure requirements.
As discussed in section II.A.2 of this preamble, the Departments
are proposing to require plans and issuers to cover OTC contraceptive
items without a prescription and without imposing cost-sharing
requirements. To ensure individuals are aware that OTC contraceptive
items are covered consistent with these proposed rules, plans and
issuers would be required to inform individuals of this benefit under
the plan or coverage. Participants, beneficiaries, and enrollees should
have access to more robust information to ensure they understand their
plan's or issuer's policies regarding coverage of OTC contraceptive
items without a prescription and without cost sharing, and in the
Departments' view, the self-service tool would offer an effective means
of communicating such information. Therefore, the Departments propose
to require plans and issuers to make an additional cost-sharing
information disclosure to participants, beneficiaries, and enrollees in
new proposed 26 CFR 54.9815-2715A2(b)(1)(vi), 29 CFR 2590.715-
2715A2(b)(1)(vi), and 45 CFR 147.211(b)(1)(vi). Specifically, if a
participant, beneficiary, or enrollee requests cost-sharing information
for any covered contraceptive item or service through a self-service
tool, the proposed rules would require the response through the self-
service tool or, if requested, on paper to include with the information
a statement explaining that OTC contraceptive items are covered without
cost sharing and without a prescription. This statement would be
required to include a phone number and internet link that a
participant, beneficiary, or enrollee could use to learn more
information about the plan's or policy's contraception coverage. This
could be a link to an existing web page and a general customer service
line that the plan or issuer already maintains.
The requirement to provide this information would be triggered by a
search in the self-service tool for any covered contraceptive items or
services, including items or services that are not drugs or drug-led
combination products or are not available without a prescription, so
that any user seeking options to prevent pregnancy would be made aware
that OTC contraceptive items are covered without cost sharing. Under
this proposed requirement, the disclosure would be required regardless
of whether the user is searching for cost-sharing information for
contraceptive items and services from an in-network or out-of-network
provider, or if the plan or coverage maintains no network of providers.
As such, plans and issuers, including those without a network of
providers, would be required to disclose that they will cover OTC
contraceptive items without cost sharing or a prescription in
accordance with proposed 26 CFR 54.9815-2713(a)(6), 29 CFR 2590.715-
2713(a)(6), and 45 CFR 147.130(a)(3)(ii). The Departments note that
because the self-service tool requirements apply to covered items and
services, the disclosure requirements proposed in this section would
not apply to plans and issuers that do not cover contraceptive items or
services based on an objection under 45 CFR 147.132 or 147.133.\131\
The Departments request comment on whether and how these proposed
requirements should apply to entities that have an objection to only
some contraceptive items and services.
---------------------------------------------------------------------------
\131\ The Departments issued proposed rules to rescind the moral
exemption to the contraceptive coverage requirement under 45 CFR
147.133. 88 FR 7236 (Feb. 2, 2023).
---------------------------------------------------------------------------
The Departments also request comment on whether plans and issuers
should have the option to include in the statement either a phone
number or an internet link--rather than both--to where a participant,
beneficiary, or enrollee can learn more about the plan's or policy's
contraception coverage. The Departments are interested in better
understanding the benefits and burdens associated with each approach.
The Departments also request comment on whether plans and issuers
should be required to include in this statement the general names or
types of OTC contraceptive items that are covered without a
prescription and without cost sharing (for example, ``daily oral
contraceptive,'' ``Plan B (levonorgestrel),'' or ``condoms''). Under
this approach, users would not need to call the provided phone number
or navigate to the linked web page and could simply copy and paste the
provided product names into the self-service tool's search field to
find local pharmacies where they can access the product without a
prescription and without cost sharing. In particular, the Departments
request comment on the burdens on plans and issuers to provide a list
that may need to be updated in the self-service tool's statement as
circumstances change (such as if additional OTC contraceptive items
come to market or new therapeutic equivalents become available) or that
could require multiple alternative disclosures for a plan or issuer
that has coverage options across geographic regions based on
availability in the specific market. In addition, the Departments
request comment on potential benefits to consumers of listing in the
tool itself the OTC contraceptive items covered without a prescription
and without cost sharing, rather than having to gather this information
by clicking an internet link or calling a customer service line.
The Departments also request comment on whether plans and issuers
should be required to include in the statement information on coverage
of therapeutic equivalents or the exceptions process under these
proposed rules and, if so, how disclosures should be presented to
ensure the additional information is meaningful and actionable for
consumers.\132\ For example, the Departments request comment on whether
the statement should indicate that an exceptions process is available
so individuals can receive coverage for any recommended preventive
service, including an OTC contraceptive item, that is medically
necessary for the individual; and, if so, how to present this
information in a way that would be meaningful and actionable for
consumers. Similarly, the Departments request comment on whether the
[[Page 85773]]
statement should disclose that plans and issuers must cover all FDA-
approved contraceptive drugs and drug-led combination products without
cost sharing, other than those for which there is at least one
therapeutic equivalent drug or drug-led combination product that the
plan or issuer covers without cost sharing; and, if so, how to present
this information in a way that would be meaningful and actionable for
consumers.
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\132\ See sections II.A.1 and II.A.2.b of the preamble to these
proposed rules, respectively, for a discussion of the exceptions
process and therapeutic equivalence approach proposals.
---------------------------------------------------------------------------
The Departments also request comment regarding the challenges of
implementing and maintaining such statements, information about their
potential effectiveness in improving access to OTC contraceptive items,
and other information that could help inform potential future
disclosures related to other recommended preventive services. The
Departments also request comment on whether additional self-service
tool requirements need to be specified to ensure plans and issuers
fully inform participants, beneficiaries, and enrollees of the
availability of covered OTC contraceptive items without cost sharing.
Lastly, the Departments believe that broadly disseminating
information on the availability and coverage of OTC contraceptive items
without cost sharing to eligible individuals and members of the public
would increase access to this benefit, if finalized as proposed, and
would allow individuals to select the plan that best meets their needs.
Therefore, the Departments request comment on how plans and issuers
could efficiently and effectively provide such information to eligible
individuals, participants, beneficiaries, enrollees, and members of the
public, including the relative benefits and burdens of doing so. For
example, the Departments are interested in whether it would be feasible
for plans and issuers to provide general coverage and cost-sharing
information on a public website. Similarly, the Departments are
interested in whether plans and issuers should be required to provide
more tailored cost and benefit information to participants,
beneficiaries, or enrollees when they provide other relevant plan
documents, such as Summaries of Benefits and Coverage (SBCs) or drug
formularies. The Departments also request comment on how plans and
issuers can make information available to participants, beneficiaries,
and enrollees about the specific steps they would need to take to
access OTC contraceptive items without cost sharing, particularly when
plans and issuers do not have network providers available that can
provide access to such items. Lastly, the Departments request comment
on additional ways to communicate this information effectively to
individuals in vulnerable and underserved communities.
C. Applicability
The proposed amendments to 26 CFR 54.9815-2713(a)(4), 29 CFR
2590.715-2713(a)(4), and 45 CFR 147.130(a)(4) regarding an exceptions
process would apply on the effective date of the final rules. The
Departments assume that most plans and issuers generally already have
in place an exceptions process for recommended preventive services to
align with previously issued guidance, although the Departments
acknowledge in section IV.B.2.d of this preamble that some plans and
issuers could incur costs to develop or update an exceptions process to
comply with these proposed rules, if finalized. While prior guidance
has generally focused on the use of an exceptions process in the
context of contraceptive coverage and coverage of PrEP to prevent HIV,
the Departments expect that plans and issuers could adapt existing
exceptions processes to accommodate additional recommended preventive
services as necessary to comply with the proposed amendments by the
effective date of the final rules.
The Departments propose delayed applicability dates for the
proposed amendments to the preventive services regulations that are
specific to contraceptive items. Specifically, the Departments propose
that the proposed provisions of 26 CFR 54.9815-2713(a)(6), 29 CFR
2590.715-2713(a)(6), and 45 CFR 147.130(a)(6) would apply for plan
years (in the individual market, policy years) beginning on or after
January 1, 2026. These proposed rules, if finalized, would mandate the
use of the currently optional therapeutic equivalence approach
described in FAQs Part 64, where applicable, and newly require the
coverage of OTC contraceptive items without a prescription. In the
Departments' view, the proposed applicability dates appropriately
balance the need for improved access to coverage of recommended
preventive services with the time necessary for plans and issuers to
make the systems and operational changes to implement these proposals.
Until any final rules are issued and applicable, the Departments
would continue to consider plans and issuers that provide coverage
consistent with the therapeutic equivalence approach and have an easily
accessible, transparent, and sufficiently expedient exceptions process
that is not unduly burdensome as outlined in FAQs Part 64 to be in
compliance with section 2713 of the PHS Act and its implementing
regulations with respect to coverage of recommended contraceptives that
are drugs and drug-led devices.
To align with applicability dates for the proposed requirements for
OTC contraceptive items and therapeutic equivalents, the proposed
requirements in 26 CFR 54.9815-2715A2, 29 CFR 2590.715-2715A2 and 45
CFR 147.211 that would direct plans and issuers to disclose information
related to contraceptive coverage in the self-service tool would be
applicable to plans and issuers for plan years (or in the individual
market, policy years) beginning on or after January 1, 2026.
The Departments request comment on the proposed applicability
dates. With respect to the proposed delayed applicability dates, the
Departments request comment on whether an earlier applicability date
(such as the effective date of any final rules) would be feasible.
III. Severability
In the event that any provision of these proposed rules, if
finalized, is held to be invalid or unenforceable by its terms, or as
applied to any person or circumstance, the Departments intend that
these rules shall be construed so as to continue to give maximum effect
to these rules as permitted by law, unless the holding shall be one of
utter invalidity or unenforceability. In the event a provision is found
to be utterly invalid or unenforceable, the provision shall be
severable from these proposed rules as finalized, as well as the final
rules they amend and shall not affect the remainder thereof or the
application of the provision to persons not similarly situated or to
dissimilar circumstances.
In these rules, the Departments are proposing several amendments to
reduce barriers to coverage and promote access to recommended
preventive services, including OTC contraceptive items. The
Departments' authority under section 9833 of the Code, section 734 of
ERISA, sections 2713, 2715A, and 2792 of the PHS Act, and sections
1311(e)(3)(C) and 1321 of the ACA to propose these amendments is well-
established in law and long-standing practice and should be upheld in
any legal challenge. However, in the event that any portion of the
final rules related to any of the proposals in these rules, if
finalized, is declared invalid, the Departments intend that the other
provisions would be severable, except as described in this section of
the preamble. For example, if a court were to find unlawful (1) the
requirement that plans and issuers utilizing medical management
techniques provide an
[[Page 85774]]
exceptions process in order for such techniques to be considered
reasonable; (2) the requirement to provide coverage for OTC
contraceptive items without requiring a prescription or imposing cost
sharing; or (3) the therapeutic equivalence approach to reasonable
medical management for contraceptive items that are drugs and drug-led
combination products, the Departments intend the remaining provisions
of the rules to stand. Additionally, the Departments intend for the
proposed amendments to the preventive services regulations to remain in
place in the event that a court were to find unlawful any portion of
the rules, if finalized, with respect to the proposals related to
disclosing information related to contraceptive coverage through the
self-service tool. However, the Departments do not intend for the
disclosure through the self-service tool to remain in place in the
event that a court were to find unlawful the requirement to provide
coverage for OTC contraceptive items without requiring a prescription
or imposing cost sharing, as the disclosure requirements would not
provide meaningful information to consumers in the absence of these
underlying coverage requirements.
IV. Regulatory Impact Analysis
A. Summary--Departments of Health and Human Services and Labor \133\
---------------------------------------------------------------------------
\133\ In sections IV.A, IV.B, and IV.C of this preamble, ``the
Departments'' refers to the Departments of HHS and Labor.
---------------------------------------------------------------------------
These proposed rules would make several changes to the requirements
for non-grandfathered group health plans and health insurance issuers
offering non-grandfathered group or individual health insurance
coverage to provide coverage of certain recommended preventive services
without cost sharing under section 2713 of the PHS Act and its
implementing regulations. First, these proposed rules would provide
that medical management techniques used by plans and issuers with
respect to recommended preventive services, including contraceptive
items, would not be considered reasonable unless the plan or issuer
provides an easily accessible, transparent, and sufficiently expedient
exceptions process that allows an individual to receive coverage
without cost-sharing requirements for a recommended preventive service
according to the frequency, method, treatment, or setting that is
medically necessary with respect to the individual, as determined by
the individual's attending provider. These proposed rules also would
require plans and issuers to cover recommended OTC contraceptive items
without a prescription and without imposing cost-sharing requirements.
These proposed rules would further require plans and issuers to cover
all recommended contraceptive items that are drugs and drug-led
combination products without imposing cost-sharing requirements, unless
a therapeutic equivalent of the drug or drug-led combination product is
covered without cost sharing. Lastly, these proposed rules would amend
the Transparency in Coverage final rules implementing section 2715A of
the PHS Act and section 1311(e)(3) of the ACA by requiring plans and
issuers to provide information related to contraceptive coverage and
cost-sharing requirements, including a statement explaining the
coverage of OTC contraceptive items without cost sharing, in their
Transparency in Coverage internet-based self-service tool or, if
requested by the individual, on paper.
The Departments have examined the impacts of these proposed rules
as required by Executive Order 12866 on Regulatory Planning and Review
(September 30, 1993),\134\ Executive Order 13563 on Improving
Regulation and Regulatory Review (January 18, 2011),\135\ Executive
Order 14094 on Modernizing Regulatory Review (April 6, 2023),\136\ the
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354),
section 1102(b) of the Social Security Act, section 202 of the Unfunded
Mandates Reform Act of 1995 (March 22, 1995, Pub. L. 104-4), and
Executive Order 13132 on Federalism (August 4, 1999).\137\
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\134\ Executive Order 12866 of September 30, 1993, 58 FR 51735
(October 4, 1993).
\135\ Executive Order 13563 of January 18, 2011, 76 FR 3821
(January 21, 2011).
\136\ Executive Order 14094 of April 6, 2023, 88 FR 21879 (April
11, 2023).
\137\ Executive Order 13132 of August 4, 1999, 64 FR 43255
(August 10, 1999).
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B. Executive Orders 12866, 13563, and 14094--Departments of Health and
Human Services and Labor
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 14094 (Modernizing Regulatory Review) amends section 3(f) of
Executive Order 12866 (Regulatory Planning and Review). The amended
section 3(f) of Executive Order 12866 defines a ``significant
regulatory action'' as an action that is likely to result in a rule:
(1) having an annual effect on the economy of $200 million or more in
any 1 year (adjusted every 3 years by the Administrator of the Office
of Information and Regulatory Affairs (OIRA) in the Office of
Management and Budget (OMB) for changes in gross domestic product), or
adversely affecting in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, Territorial, or Tribal governments
or communities; (2) creating a serious inconsistency or otherwise
interfering with an action taken or planned by another agency; (3)
materially altering the budgetary impacts of entitlement grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raising legal or policy issues for which centralized
review would meaningfully further the President's priorities or the
principles set forth in Executive Order 12866, as specifically
authorized in a timely manner by the Administrator of OIRA in each
case.\138\
---------------------------------------------------------------------------
\138\ Executive Order 14094 of April 6, 2023, 88 FR 21879 at
21879 (April 11, 2023).
---------------------------------------------------------------------------
A regulatory impact analysis (RIA) must be prepared for rules
deemed significant under section 3(f). Based on the Departments'
estimates, OMB's OIRA has determined this rulemaking is significant
under section 3(f)(1) as measured by the $200 million or more in any 1
year threshold. Therefore, OMB has reviewed these proposed rules, and
the Departments have provided the following assessment of their impact.
1. Need for Regulatory Action
As discussed in section II of this preamble, ongoing complaints and
reports of noncompliance with section 2713 of the PHS Act and its
implementing regulations indicate that participants, beneficiaries, and
enrollees face barriers when attempting to use their coverage to access
recommended preventive services without cost sharing. As a result of
these concerns and other significant activity related to preventive
services, the Departments are proposing to amend the regulations
governing coverage of recommended preventive services in order to
ensure that participants, beneficiaries, and enrollees would be able to
access the full range of recommended preventive services to which they
are entitled, with particular focus on strengthening coverage
requirements with respect to recommended contraceptive items for women,
as summarized in section IV.A
[[Page 85775]]
of this preamble. The Departments consider these provisions to be
timely and necessary given the ongoing documented challenges faced by
consumers in accessing recommended preventive services, as discussed
further in section IV.B.2.a of this preamble.
2. Summary of Impacts
In accordance with Executive Order 12866 and OMB Circular A-4,
table 1 depicts an accounting statement summarizing the Departments'
assessment of the benefits, costs, and transfers associated with these
regulatory actions. The Departments are unable to quantify all
benefits, costs, and transfers associated with these proposed rules,
but have sought, where possible, to describe these non-quantified
impacts.
---------------------------------------------------------------------------
\139\ The Departments expect self-insured group health plans to
rely on TPAs to implement the proposed requirements and compensate
them accordingly and thereby bear any implementation costs.
Table 1--Accounting Table
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Benefits
----------------------------------------------------------------------------------------------------------------
Non-Quantified:
Potential reduction in unintended pregnancies and improved health outcomes for covered individuals.
Increased convenience and decreased costs for covered individuals who no longer need to obtain a
prescription to obtain recommended OTC contraceptive items without cost sharing..
Decreased costs to plans and issuers due to improved health outcomes associated with increased
coverage of recommended preventive services without cost sharing and avoided unintended pregnancies..
Potential benefits associated with increased awareness of coverage of OTC contraceptive items
without a prescription and without cost sharing..
----------------------------------------------------------------------------------------------------------------
Costs Estimate............ Year dollar Discount............ Period covered
rate................
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($/year).... $9.9 million........ 2024 2 percent........... 2026-2035
----------------------------------------------------------------------------------------------------------------
Quantified:
Costs to issuers and TPAs, on behalf of self-insured group health plans, associated with the
disclosure of coverage and cost-sharing requirements for OTC contraceptive items, including one-time costs
of approximately $35.1 million for integrating the contraception statement language into the existing
Transparency in Coverage internet-based self-service tool and creating or updating a webpage to provide
information about coverage benefits, and annual costs of approximately $6.1 million for programming
updates, webpage maintenance, training customer service representatives, and responding to calls to provide
assistance; these costs would ultimately be incurred by plans and issuers.\139\.
Non-Quantified:
Increased costs to plans and issuers due to changes in utilization of recommended preventive
services..
Potential administrative costs to plans and issuers associated with the establishment of or use of
an existing exceptions process that allows an individual to receive coverage without cost-sharing
requirements for a medically necessary recommended preventive service..
Cost to pharmacies, plans, and issuers to update billing processes and systems for covered OTC
products..
----------------------------------------------------------------------------------------------------------------
Transfers Estimate............ Year dollar Discount............ Period covered
rate................
----------------------------------------------------------------------------------------------------------------
Annualized Monetized (Excluding $468.6 million...... 2024 2 percent........... 2026-2035
Federal Budgetary) ($/year).
Annualized Monetized Federal $300.1 million...... 2024 2 percent........... 2026-2035
Budgetary ($/year).
----------------------------------------------------------------------------------------------------------------
Quantified:
Transfers totaling approximately $768.7 million per year from plans and issuers to covered
individuals caused by reduced out-of-pocket costs for contraceptive items, which plans and issuers would
recoup in the form of higher premiums..
[cir] The increase in premiums could increase the cost of employer-sponsored insurance and reduce the
share of total employee compensation subject to taxation, reducing Federal tax revenue by approximately
$217 million per year..
[cir] Net Federal spending on premium tax credits for Exchange plans could increase by approximately
$83.1 million per year..
[cir] Premiums paid (directly or indirectly, through declines in after-tax wages) by covered individuals
could increase by approximately $468.6 million per year..
Non-Quantified:
Transfers from plans and issuers to covered individuals caused by reduced out-of-pocket costs for
other recommended preventive services for which coverage without cost sharing would be accessible through
an exceptions process, which plans and issuers would recoup in the form of higher premiums. This could
result in an increase in premiums paid by covered individuals and an increase in net Federal spending on
premium tax credits for Exchange plans..
Potential transfers from plans and issuers to firms in the medicine and medical device supply chain
due to decreased bargaining leverage on prices for contraceptive items..
----------------------------------------------------------------------------------------------------------------
a. Background
Nine in ten women report using contraception at some point in their
lifetime.\140\ Estimates from the CDC indicate that 65.3 percent of
women ages 15-49 used some form of contraception between 2017 and 2019,
including permanent or one or more forms of reversible contraception
listed in the FDA's Birth Control Guide.\141\ The majority of women
used reversible contraception such as oral contraceptive pills (14
percent), long-acting reversible contraceptives (LARCs) such as
intrauterine device (IUDs) (10.4 percent), or the male condom (8.4
percent). The most common form of contraception is female sterilization
(18.1 percent), a nonreversible method.\142\
---------------------------------------------------------------------------
\140\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and
Salganicoff, A., KFF (2022). ``Contraception in the United States: A
Closer Look at Experiences, Preferences, and Coverage,'' available
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings/.
\141\ Daniels, K. and Abma, J.C., CDC (2020). ``Current
Contraceptive Status Among Women Aged 15-49: United States, 2017-
2019,'' NCHS Data Brief No. 388, available at https://www.cdc.gov/nchs/products/databriefs/db388.htm.
\142\ Id.
---------------------------------------------------------------------------
The 2022 KFF Women's Health Survey (of U.S. women ages 18-49) found
that nearly two-thirds of survey respondents who were not currently
trying to get pregnant reported avoiding a pregnancy in the next month
as being ``very important.'' \143\ The same survey found that among
women who use contraception, 61 percent use it only to prevent
pregnancy, 24 percent use it both to prevent pregnancy and for some
other reason, and 15 percent use it solely for a reason not related to
[[Page 85776]]
preventing pregnancy (for example, managing a medical condition or
preventing a sexually transmitted infection).\144\ Individuals'
contraceptive needs, including because of side effects, can vary
depending on their health history, medical needs, allergies, and other
factors. A recent study that reviewed two decades of literature on
contraception found that hormonal contraceptives can impact medical
conditions associated with hormonal fluctuations, including acne,
endometriosis, and premenstrual dysphoric disorder.\145\ This and other
studies detail that combined hormonal contraceptives and progestin-only
pills often have different side effects for women with varying
backgrounds or medical conditions.\146\ Studies emphasize that it is
difficult to predict how individuals will react to oral contraceptives,
with one noting that ``certain side effects . . . may be considered
beneficial by some people but unacceptable by others,'' and that
``different formulations have different side effect profiles, so
patients may need to try another formulation if an undesirable side
effect occurs.'' \147\ Studies point to the fact that optimal
contraception selection depends on a person's health needs and personal
factors and preferences.\148\
---------------------------------------------------------------------------
\143\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and
Salganicoff, A., KFF (2022). ``Contraception in the United States: A
Closer Look at Experiences, Preferences, and Coverage,'' available
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings/.
\144\ Id.
\145\ Teal, S. and Edelman, A. (2021). ``Contraception
Selection, Effectiveness, and Adverse Effects: A Review,'' JAMA,
available at https://pubmed.ncbi.nlm.nih.gov/34962522.
\146\ Britton, L.E., Alspaugh, A., Greene, M.Z., and McLemore,
M.R. (2020). ``An Evidence-Based Update on Contraception,'' American
Journal of Nursing, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7533104.
\147\ Id.
\148\ Id.
---------------------------------------------------------------------------
A growing body of research finds there is a mismatch between
preferred and commonly used contraception methods.\149\ These studies
find that LARCs and hormonal methods generally have higher rates of
satisfaction than condoms, withdrawal, and no method of contraception.
Nearly 25 percent of all people, and nearly 30 percent of people
earning under 200 percent of the Federal Poverty Line, are not using
their preferred method. People report using less preferred methods due
to issues with side effects, cost and affordability, inadequate
counseling, and other access barriers such as facilities not offering
the preferred method.\150\ The mismatch between preferred and used
method was found to be less common among those with higher incomes,
those with insurance coverage, and those that have a usual source of
care.\151\ The literature also finds that unsatisfied preferences were
associated with discontinuation of contraception method and
subsequently higher rates of pregnancy, indicating that reducing
barriers that contribute to this satisfaction mismatch has the
potential to reduce unwanted pregnancies, especially among underserved
communities such as women of color and low-income communities.\152\
---------------------------------------------------------------------------
\149\ Burke, K. and Potter, J. (2023). ``Meeting Preferences for
Specific Contraceptive Methods: An Overdue Indicator,'' Studies in
Family Planning, available at https://onlinelibrary.wiley.com/doi/full/10.1111/sifp.12218.
\150\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and
Salganicoff, A., KFF (2022). ``Contraception in the United States: A
Closer Look at Experiences, Preferences, and Coverage,'' available
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings and Burke, K. and Potter, J. (2023). ``Meeting Preferences
for Specific Contraceptive Methods: An Overdue Indicator,'' Studies
in Family Planning, available at https://onlinelibrary.wiley.com/doi/full/10.1111/sifp.12218.
\151\ Burke, K. and Potter, J. (2023). ``Meeting Preferences for
Specific Contraceptive Methods: An Overdue Indicator,'' Studies in
Family Planning, available at https://onlinelibrary.wiley.com/doi/full/10.1111/sifp.12218.
\152\ Id.
---------------------------------------------------------------------------
The 2022 KFF Women's Health Survey found that 77 percent of
respondents (and 79 percent of respondents with private health
insurance coverage) favored making oral contraceptive pills available
OTC without a prescription if research showed they are safe and
effective, and 39 percent of respondents indicated they would be likely
to use oral contraceptive pills available OTC without a
prescription.\153\ The survey further found that 29 percent of
respondents currently using oral contraceptive pills would be ``very
likely'' to use OTC oral contraceptive pills that do not require a
prescription, as would 19 percent of respondents currently using other
contraceptive methods and 15 percent of respondents currently not using
any contraceptive method.\154\ These figures indicate that take-up of
OTC contraceptive items available without a prescription and without
cost sharing might be fairly high. When asked why they would be likely
to use OTC oral contraceptive pills, most respondents reported that it
is because they are more convenient (59 percent) or faster (15
percent), while 8 percent reported that they do not want a physical or
pelvic exam, 7 percent reported that OTC oral contraceptive pills are
more confidential, 6 percent reported that they think it would save
money, and 3 percent reported that they do not want to have to use
health insurance.\155\ Coverage of OTC contraceptive items without cost
sharing or a prescription requirement would be particularly beneficial
for certain contraceptive users considering that 33 percent of hormonal
contraceptive users indicated that they missed taking their birth
control on time because they were not able to get their next supply on
time \156\ and 36 percent of oral contraceptive users have missed
taking it on time for the same reason.\157\
---------------------------------------------------------------------------
\153\ This figure was the same (39 percent) among the subset of
respondents with private health insurance coverage. See Long, M.,
Frederiksen, B., Ranji, U., Diep, K., and Salganicoff, A., KFF
(2022). ``Interest in Using Over-the-Counter Oral Contraceptive
Pills: Findings from the 2022 KFF Women's Health Survey,'' available
at https://www.kff.org/womens-health-policy/issue-brief/interest-using-over-the-counter-oral-contraceptive-pills-findings-2022-kff-womens-health-survey.
\154\ Id.
\155\ Id.
\156\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and
Salganicoff, A., KFF (2022). ``Contraception in the United States: A
Closer Look at Experiences, Preferences, and Coverage,'' available
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings.
\157\ Long, M., Diep, K., Sobel, L. and Salganicoff, A., KFF
(2023). ``Over-the-Counter Oral Contraceptive Pills,'' available at
https://www.kff.org/womens-health-policy/issue-brief/over-the-counter-oral-contraceptive-pills.
---------------------------------------------------------------------------
More generally, as discussed in section II of this preamble, cost
sharing reduces the use of preventive care, and some individuals may
forego a preventive service entirely rather than being forced to choose
between a form of care that their provider has determined would not be
medically appropriate for them or to pay out-of-pocket for the care
they need.
b. Number of Affected Entities
This section addresses entities that would be directly affected by
these proposed rules. These proposed rules would apply to non-
grandfathered group health plans and health insurance issuers offering
non-grandfathered group or individual health insurance coverage.\158\
For the purposes of this RIA, the term covered plans refers to these
plan and coverage types. Health insurance company refers to a single
entity that offers health insurance coverage in one or multiple States,
which might own or be affiliated with one or multiple entities that are
separately required to be licensed to engage in the business of
insurance in each such State. Health insurance issuer or issuer means
an insurance company, insurance service, or insurance organization
(including a health maintenance organization (HMO)) that is required to
be licensed to engage in
[[Page 85777]]
the business of insurance in a State and that is subject to State law
that regulates insurance.
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\158\ As noted in section I.A, these proposed rules would not
modify Federal conscience protections related to contraceptive
coverage for employers, plans and issuers. See fn. 24.
---------------------------------------------------------------------------
The Departments estimate that there are 499,299 ERISA-covered self-
insured, non-grandfathered group health plans \159\ and 1,844,520
ERISA-covered fully-insured, non-grandfathered group health plans.\160\
The Departments further estimate that there are 76,345 non-
grandfathered non-Federal governmental plans sponsored by State and
local governmental entities.\161\
---------------------------------------------------------------------------
\159\ The Departments estimate that there are 594,404 ERISA-
covered self-insured group health plans based on data from the 2022
Medical Expenditure Panel Survey Insurance Component (MEPS-IC) and
the 2020 County Business Patterns from the Census Bureau. The 2020
KFF Employer Health Benefits Survey reported that in 2020, 16
percent of firms offering health benefits offered at least one
grandfathered health plan (see KFF, 2020 Kaiser Employer Health
Benefits Survey, available at https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf). Thus, the
Departments have calculated the number of self-insured, non-
grandfathered plans in the following manner: 594,404 ERISA-covered
self-insured group health plans x (100 percent minus 16 percent) =
499,299.
\160\ The Departments estimate that there are 2,195,857 ERISA-
covered fully-insured group health plans based on data from the 2022
Medical Expenditure Panel Survey Insurance Component (MEPS-IC) and
the 2020 County Business Patterns from the Census Bureau. The 2020
KFF Employer Health Benefits Survey reported that in 2020, 16
percent of firms offering health benefits offered at least one
grandfathered health plan (see KFF, 2020 Kaiser Employer Health
Benefits Survey, available at https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf). Thus, the
Departments have calculated the number of fully-insured, non-
grandfathered plans in the following manner: 2,195,857 ERISA-covered
fully-insured group health plans x (100 percent minus 16 percent) =
1,844,520.
\161\ According to data from the 2022 Census of Governments,
there are 90,887 State and local governmental entities (see U.S.
Census Bureau, 2022 Census of Governments, available at https://www.census.gov/data/tables/2022/econ/gus/2022-governments.html). The
Departments assume that each State and local governmental entity
sponsors one health plan on average. Therefore, the Departments
estimate that there are 90,887 non-Federal governmental health
plans. The 2020 KFF Employer Health Benefits Survey reported that 16
percent of employers offer at least one grandfathered plan (see KFF,
2020 Kaiser Employer Health Benefits Survey, available at https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf). The Departments therefore estimate there are
approximately 76,345 non-grandfathered non-Federal governmental
plans.
---------------------------------------------------------------------------
Issuers and third-party administrators (TPAs) provide key support
for plan compliance with laws and regulations. Plans often have TPAs
provide expertise in plan design, establish networks, and administer
claims. For medications, issuers and TPAs often provide these services
via contracted or affiliated PBMs.
The Departments assume that issuers and TPAs would be the
organizations performing the work of redesigning prescription drug
formularies, negotiating new or amended network arrangements with
pharmacies, and developing any necessary amendments and changes to
billing systems and procedures.
The Departments estimate that these proposed rules would affect 479
health insurance companies nationwide that provide coverage in the
group and individual health insurance markets, with 1,467 issuers
(health insurance company/State combinations).\162\
---------------------------------------------------------------------------
\162\ The Departments' estimate of the number of health
insurance companies and the number of issuers (issuer/State
combinations) is based on medical loss ratio reports submitted by
issuers for the 2022 reporting year (see Centers for Medicare &
Medicaid Services, ``Medical Loss Ratio Data and System Resources
(2022),'' available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr).
---------------------------------------------------------------------------
These proposed rules would also affect pharmacies, given the
coverage requirements for OTC contraceptives proposed in these proposed
rules. According to the Census Bureau's Statistics of U.S. Businesses,
there are 19,234 firms in the pharmacies and drug stores sector in the
U.S. as of 2017.\163\
---------------------------------------------------------------------------
\163\ U.S. Census Bureau (2017). 2017 SUSB Annual Data Tables by
Establishment Industry (Data by Enterprise Receipts Size), available
at https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.
---------------------------------------------------------------------------
Because these proposed rules have the potential to impact the gross
premiums of covered plans--either directly as paid by plan participants
and enrollees and/or indirectly by their employers in lieu of salary or
other benefits--all participants, beneficiaries, and enrollees in
affected plans may potentially be affected by these proposed rules,
regardless of their use of contraceptive items. For purposes of this
RIA, covered individuals refers to participants, beneficiaries, and
enrollees in covered plans that are subject to the proposed rules.
There are an estimated 181.4 million individuals in plans that
would be affected by these proposed rules.\164\ Within this total,
there are an estimated 21 million covered individuals enrolled in
coverage provided through an Exchange (with approximately 16 million
policyholders).\165\ This separate tally of Exchange enrollees is used
as an input to the estimation of the net Federal spending impact of
these proposed rules in the transfers section IV.B.2.e of this
preamble.
---------------------------------------------------------------------------
\164\ The calculation (approximately 181,412,000 individuals) is
based on reports of private insurance coverage in the 2023 Current
Population Survey Annual Social and Economic Supplement (CPS-ASEC).
Private coverage in that survey includes employment-based (including
non-government, non-Federal government, and Federal government
employment), directly purchased (Exchange and non-Exchange), and
TRICARE coverage. To arrive at the number of covered individuals
(which excludes TRICARE enrollees), the Departments remove from the
count respondent households for which the respondent is a member of
the military. It also removes respondents who are over 65 or who
report government insurance (such as Medicare, Medicaid, or VA) in
addition to private insurance. The Departments view this calculation
as an upper bound because the data are not sufficient to identify
and exclude enrollees in grandfathered plans or individuals in non-
ACA compliant individually purchased plans. The Departments do not
have an estimate of the relevant number of enrollees in either of
these plan types; the latest available data on percentage of
enrollees in grandfathered plans is from the 2020 KFF Employer
Health Benefits Survey. See KFF, 2020 Kaiser Employer Health
Benefits Survey, available at https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf, reporting
that 14 percent of individuals were enrolled in grandfathered plans.
However, the number has been declining since 2011, falling from 56
percent in 2011. See KFF, 2018 Kaiser Employer Health Benefits
Survey, Figure 13.3, available at https://files.kff.org/attachment/Report-Employer-Health-Benefits-Annual-Survey-2018). In the absence
of more recent data, the Departments cannot rule out that the rate
has continued to fall.
\165\ See CMS, ``Open Enrollment Period Report: Final National
Snapshot,'' available at https://www.cms.gov/newsroom/fact-sheets/marketplace-2024-open-enrollment-period-report-final-national-snapshot (reporting 21,310,538 Exchange enrollees). The estimated
conversion between total enrollees and policyholders--15 enrollees
per 11 policyholders--is based on medical loss ratio reports
submitted by issuers for the 2021 reporting year, in which the
number of policyholders in individual health insurance coverage
offered in the individual market was approximately 11 million, and
the number of enrollees was approximately 15,000,000. See CMS
(2022), ``Medical Loss Ratio Data and System Resources,'' https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
---------------------------------------------------------------------------
Among individuals in covered plans, the Departments estimate that
51.71 million individuals (28.5 percent) are women of reproductive age
(15-49).\166\ The Departments calculate, based on data from the 2017-
2019 National Survey of Family Growth (NSFG),\167\ that 29.4 percent of
women of reproductive age who have private health insurance are using
contraceptive items that are (only now, in the case of oral
contraceptive pills) available OTC (oral contraception pills, condoms,
and/or emergency contraception) in a given enrollment month. This
estimate is somewhat higher than the 2020 estimate by the National
Center for Health Statistics (approximately 22.4 percent), given that
the Departments' analysis restricts its calculations to women who
[[Page 85778]]
report enrollment in private health insurance coverage.\168\ Thus, the
Departments estimate that 15.2 million individuals (8.4 percent of all
individuals in covered plans) are women of reproductive age using these
forms of contraceptives.\169\ The Departments request comment on this
analysis.
---------------------------------------------------------------------------
\166\ The calculation is based on the reports of private
insurance coverage in the 2023 CPS-ASEC. The calculation
specifically includes all individuals who report their sex as female
and are of age 15 to 49 years. Private insurance coverage includes
those covered by directly purchased (Exchange and non-Exchange) and
employment-based health insurance. Those in the armed services are
excluded from the calculation.
\167\ See CDC, ``2017-2019 NSFG: Public-Use Data Files,
Codebooks, and Documentation,'' available at https://www.cdc.gov/nchs/nsfg/nsfg_2017_2019_puf.htm.
\168\ See CDC, ``Current Contraceptive Status Among Women Aged
15-49: United States, 2017-2019,'' available at https://www.cdc.gov/nchs/data/databriefs/db388-H.pdf (estimating that approximately 65
percent of women ages 15-49 were currently using contraception. By
method, these included female sterilization (18.1 percent), oral
contraceptive pills (14.0 percent), LARCs (10.4 percent), male
condoms (8.4 percent), male sterilization (5.6 percent), Depo-
Provera, contraceptive ring, or patch (3.1 percent), and 5.7 percent
across all other methods (includes diaphragm, withdrawal, periodic
abstinence with safe period assessed via calendar rhythm,
temperature, or cervical mucus test)).
\169\ Approximately 181.4 million individuals in covered plans,
times 28.5 percent who are women of reproductive age, times 29.4
percent of these who are assumed to use recommended OTC
contraceptives, per the NSFG analysis (see https://www.cdc.gov/nchs/nsfg/nsfg_2017_2019_puf.htm).
---------------------------------------------------------------------------
Table 2 summarizes the number of entities that would be affected by
these proposed rules.
Table 2--Number of Affected Entities
------------------------------------------------------------------------
Number of
Affected entity entities
------------------------------------------------------------------------
ERISA-covered non-grandfathered group health plans... 2,343,819
ERISA-covered self-insured, non-grandfathered 499,299
group health plans..............................
ERISA-covered fully-insured, non-grandfathered 1,844,520
group health plans..............................
Non-grandfathered non-Federal governmental plans..... 76,345
Issuers (health insurance company/State combinations) 1,467
Pharmacies and drug stores........................... 19,234
Covered individuals.................................. 181,412,000
------------------------------------------------------------------------
c. Benefits
This analysis provides a qualitative discussion of the benefits
associated with these proposed rules, as the Departments do not have
the data necessary to quantify these benefits. The Departments request
comment and data on how to quantify these benefits.
(1) Enhanced Coverage of a Wider Range of Preventive Services Without
Cost Sharing for Eligible Individuals Leading to a Potential Reduction
in Unintended Pregnancies and Improved Health Outcomes for Individuals
The potential for these proposed rules to facilitate greater
coverage of a wider range of preventive services without cost sharing
for eligible individuals could lead to important benefits to health and
satisfaction (for example, in the form of better matches between chosen
contraceptive items and individuals' medical needs and preferences).
There is clear evidence that many contraceptive users are not using
their preferred form of contraception because of concerns about side
effects, cost, or availability, for example.\170\ Greater flexibility
in contraceptive choice could directly improve quality of life,
including by minimizing side effects and facilitating covered
individuals in optimizing contraceptive use according to their unique
needs and preferences. Improved satisfaction with one's contraceptive
method, including by reducing unwanted side effects, would be an
important benefit of these proposed rules. Given the many variations of
contraceptive drugs or drug-led combination products, each with
different hormonal properties, dosage levels, physical properties,
delivery mechanisms, side effects, and benefits, there is significant
need for individual tailoring and choice. Better aligning contraceptive
use with a method or product with preferred health outcomes could be a
source of major health improvements for covered individuals, as
discussed further in this section. The ability to select among more
contraceptive options at zero cost may facilitate such alignment,
helping more women find a contraceptive that works best for their
medical needs.
---------------------------------------------------------------------------
\170\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and
Salganicoff, A., KFF (2022). ``Contraception in the United States: A
Closer Look at Experiences, Preferences, and Coverage,'' available
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings.
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Increased coverage of medically necessary preventive services
without cost-sharing requirements through the use of an exceptions
process would have a similar effect of expanding covered individuals'
ability to access and use appropriate recommended preventive services
by eliminating a financial barrier to receiving medically necessary
care.
The Departments recognize the potential for a reduction in
unintended pregnancies and improved health outcomes as a result of
these proposed rules. First, a reduction in unintended pregnancies and
improved health outcomes could result from increases in the share of
covered women who use contraception.\171\ Second, these proposed rules
could induce some contraceptive switching among covered women already
using reversible contraception that could create a closer match between
the contraceptive method or product with the best medical outcomes for
the individual and the method or product they currently use. In such
cases, individuals able to switch to a method or product with the best
medical outcome for them may more reliably adhere to the relevant usage
recommendations.\172\
---------------------------------------------------------------------------
\171\ See CDC, ``Reproductive Health, Unintended Pregnancy,''
available at https://www.cdc.gov/reproductive-health/hcp/unintended-pregnancy/index.html (finding that 41.6 percent of pregnancies were
unintended).
\172\ Fiffick, A.N., Iyer, T.K., Cochran, T., and Batur, P.
(2023). ``Update on Current Contraceptive Options: A Case-based
Discussion of Efficacy, Eligibility, and Use.'' Cleveland Clinic
Journal of Medicine, available at: https://www.ccjm.org/content/ccjom/90/3/181.full.pdf.
---------------------------------------------------------------------------
Any benefit of reducing unintended or unplanned pregnancies would
scale in proportion to the extent of new (or more reliable) use of
contraception. The Departments do not have the data necessary to
precisely estimate the extent of such an expansion in contraception use
along both the extensive (new use) and intensive (more reliable use)
margins, but anticipate relatively small effects on the number of women
newly using any contraceptives as a result of the proposed rules, as
discussed later in this section.
[[Page 85779]]
Studies have consistently shown that approximately 70 percent of
privately insured women who use contraception have the cost of their
method covered in full by private health insurance.\173\ These studies
include evidence on the share of privately-insured women who do not pay
cost sharing for oral contraceptives after passage of the ACA.\174\
That these proposed rules would apply to a population of privately-
insured women who already have coverage of certain contraceptives
without cost sharing suggests the possibility of a small net effect on
any contraception use for covered individuals. For example, in the 2022
KFF Women's Health Survey, only 4 percent of respondents reported cost
as a reason for not using birth control, and this figure included
individuals who did not have health insurance.\175\
---------------------------------------------------------------------------
\173\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and
Salganicoff, A., KFF (2022). ``Contraception in the United States: A
Closer Look at Experiences, Preferences, and Coverage,'' available
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings/#Contraceptive-Coverage.
\174\ Sonfield, A., Tapales, A., Jones, R.K., and Finer, L.B.
(2015). ``Impact of the Federal Contraceptive Coverage Guarantee on
Out-of-Pocket Payments for Contraceptives: 2014 Update,''
Contraception, available at https://pubmed.ncbi.nlm.nih.gov/25288034/.
\175\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and
Salganicoff, A., KFF (2022). ``Contraception in the United States: A
Closer Look at Experiences, Preferences, and Coverage,'' available
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings.
---------------------------------------------------------------------------
Nonetheless, it is plausible that by providing coverage without
cost sharing for a wider variety of contraceptive items, these proposed
rules could induce new take-up among covered individuals who were
previously dissuaded from contraceptive use because of cost and
accessibility considerations related to their preferred method, as
discussed in section IV.B.2.a of this RIA. Further, medication
adherence and consistent use of contraception could be improved if more
covered individuals have coverage of their preferred method without
cost sharing. In the 2022 KFF Women's Health Survey, among female
contraceptive users ages 18-49 who were not using their preferred
contraceptive method, 12 percent of survey respondents indicated that
the primary reason for not doing so was because they could not afford
it.\176\ A third of women report not using contraception due to
concerns over side effects,\177\ the burden of which could be lessened
by expanding the selection of covered contraceptive product choice
available without cost sharing. Such considerations could be important
given that women using contraception--especially women with low incomes
and women using less effective contraceptive methods--often report a
mismatch between their most preferred contraceptive method and the
method they usually use.\178\
---------------------------------------------------------------------------
\176\ Id.
\177\ Id. (``Among reproductive age females who are able to
conceive and are not pregnant or trying to become pregnant who are
not using contraception, four in ten say it is because they did not
want to use birth control (42 [percent]). One in three females who
are not currently using contraception report concern about side
effects (32 [percent]), and one in five (22 [percent]) say they
don't really mind if they become pregnant.'')
\178\ He, K., Dalton, V.K., Zochowski, M.K., and Hall, K.S.
(2017). ``Women's Contraceptive Preference-Use Mismatch,'' Journal
of Women's Health, available at https://pubmed.ncbi.nlm.nih.gov/27710196 and Burke, K. and Potter, J. (2023). ``Meeting Preferences
for Specific Contraceptive Methods: An Overdue Indicator,'' Studies
in Family Planning, available at https://pubmed.ncbi.nlm.nih.gov/36705876.
---------------------------------------------------------------------------
Historically, more comprehensive coverage of contraceptive services
has been shown to improve the consistent use of the most effective
short-acting methods of contraception, and the removal of cost sharing
also increases the use of more effective LARC methods.\179\ One study
found that following the implementation of the ACA contraceptive
coverage requirement, the discontinuation of use of oral contraceptive
pills fell and nonadherence to brand-name oral contraceptive pills also
declined.\180\
---------------------------------------------------------------------------
\179\ Behn, M., Pace L.E., and Leighton, K. (2019). ``The Trump
Administration's Final Regulations Limit Insurance Coverage of
Contraception,'' Women's Health Issues, available at https://www.whijournal.com/article/S1049-3867(18)30751-5/fulltext.
\180\ Pace, L., Dusetzina, S., and Keating, N. (2016). ``Early
Impact of the Affordable Care Act on Oral Contraceptive Cost
Sharing, Discontinuation, and Nonadherence,'' Health Affairs,
available at https://www.healthaffairs.org/doi/10.1377/hlthaff.2015.1624.
---------------------------------------------------------------------------
Therefore, beyond the direct benefits of improved satisfaction with
contraceptive method--due to, for example, reductions in side effects--
remedying the misalignment between contraceptive preference and
contraceptive use could lead to fewer unplanned pregnancies because of
lower rates of discontinuation.\181\
---------------------------------------------------------------------------
\181\ Burke, K. and Potter, J. (2023). ``Meeting Preferences for
Specific Contraceptive Methods: An Overdue Indicator,'' Studies in
Family Planning, available at https://pubmed.ncbi.nlm.nih.gov/36705876.
---------------------------------------------------------------------------
While the Departments do not anticipate that the proposed
requirement in these proposed rules to cover OTC contraception without
cost sharing would substantially affect the overall rate of birth
control use, to the extent that access to and use of OTC and other
contraceptive items, without cost sharing, is increased, it is expected
to provide better matching of preferred contraceptive items and thus
may ultimately improve health outcomes.
The Departments also anticipate that improved health outcomes would
result from enhanced coverage of a wider range of recommended
preventive services without cost sharing through the use of an
exceptions process for recommended preventive services offered by plans
and issuers. Covered individuals would have coverage of medically
necessary preventive services because of this provision, whereas under
current regulations they might be more likely to pay for such services
out-of-pocket or forgo such services.
The Departments request comment on this analysis.
(2) Increased Convenience and Decreased Costs for Covered Individuals
Who No Longer Need a Prescription To Obtain Recommended OTC
Contraceptive Items
The Departments anticipate that some covered individuals would
benefit from the provision of these proposed rules that would require
plans to cover recommended OTC contraceptive items without a
prescription and without cost sharing because these individuals would
face reduced transportation costs, childcare costs, and/or time costs
that would otherwise be incurred due to scheduling, travelling to, and
attending health care provider visits in order to obtain prescriptions
for contraceptives. Some covered individuals would also benefit from
this provision if they cannot secure timely access to appointments to
obtain a prescription, particularly if the individuals are in areas
with primary care shortages. Out-of-pocket visit costs, if any, would
also be avoided. Any such effects would be proportional to the number
of covered individuals forgoing such provider visits as a result of
this proposed provision, and therefore dependent on both the share of
contraceptive users who switch methods from a prescription
contraceptive to an OTC product and on the subset of these switchers
who forgo provider visits that would otherwise have been needed for a
contraceptive prescription.
As discussed further in section IV.B.2.f of this preamble, the
Departments do not anticipate a significant share of covered
individuals to both switch methods from prescription contraceptives to
OTC contraceptives and make fewer preventive health care visits. The
Departments assume that even among covered women who would avail
[[Page 85780]]
themselves of the new OTC benefit in these proposed rules, nearly all
would continue to utilize preventive care visits. Therefore, while the
benefits of reduced burdens associated with reduced health care visits
could be significant for any individuals who see providers less
frequently as a result of this proposed provision, the Departments do
not anticipate such averted benefits (or costs) would accrue to a
significant fraction of covered individuals. The Departments request
comment on this analysis.
(3) Potential Benefits of Increased Transparency by Expanding Awareness
of Coverage of OTC Contraceptive Items Without a Prescription and
Without Cost Sharing
Studies have found that increased transparency about contraceptive
care options and service costs are essential for improving
contraceptive access by increasing public awareness and understanding
about current health care policy and opportunities, and when women are
fully informed about available contraceptive methods and find them
affordable, they are more likely to use them consistently.\182\
---------------------------------------------------------------------------
\182\ Swan, L.E.T. (2021). ``The Impact of US Policy on
Contraceptive Access: A Policy Analysis,'' Reproductive Health,
available at https://reproductive-health-journal.biomedcentral.com/articles/10.1186/s12978-021-01289-3 and Planned Parenthood
Federation of America (2014). ``New Study on Birth Control Use Shows
That, When Fully Implemented, the Affordable Care Act Could
Dramatically Reduce Unintended Pregnancy in the U.S.,'' available at
https://www.plannedparenthood.org/about-us/newsroom/press-releases/new-study-birth-control-use-shows-when-fully-implemented-affordable-care-act-could-dramatically.
---------------------------------------------------------------------------
Overall, making information about OTC contraceptive coverage
without a prescription and without cost sharing available to
participants, beneficiaries, and enrollees can result in better health
outcomes, as discussed in more detail in this section IV.B.2.c of this
preamble.
The Departments request comment on this analysis.
d. Costs
This section provides a qualitative and quantitative discussion of
the costs associated with these proposed rules. The Department request
comment and data on how to better quantify these costs.
(1) Increased Costs to Plans and Issuers Due to a Change in Utilization
of Preventive Services, and Decreased Costs Due to Improved Health
Outcomes and Avoided Unintended Pregnancies
Previous analysis by the Office of the Assistant Secretary for
Planning and Evaluation (ASPE), which evaluated the impacts of the
ACA's original contraceptive coverage requirements, found no likely net
impact on gross costs of expanding utilization for contraception:
``While the costs of contraceptives for individual women can be
substantial and can influence choice of contraceptive methods,
available data indicate that providing contraceptive coverage as part
of a health insurance benefit does not add to the cost of providing
insurance coverage.'' \183\ This conclusion was reached based on a
review of the literature and of case studies on how expanding access to
reproductive care affected insurance costs and gross premiums. For
example, in 1999, Congress required the health plans in the Federal
Employees Health Benefits (FEHB) program to cover the full range of
FDA-approved contraceptive methods. ASPE concluded: ``When medical
costs associated with unintended pregnancies are taken into account,
including costs of prenatal care, pregnancy complications, and
deliveries, the net effect on premiums is close to zero.'' \184\ This
conclusion echoes the conclusion of earlier studies.\185\ The
Departments are aware that the health insurance market has evolved
since the publication of this study but are of the view that the
general results of this analysis are still relevant today.
---------------------------------------------------------------------------
\183\ Bertko, J., Glied, S., Miller, E., Simmons, A., and
Wilson, L., ASPE (2012). ``The Cost of Covering Contraceptives
through Health Insurance,'' available at https://aspe.hhs.gov/reports/cost-covering-contraceptives-through-health-insurance.
\184\ Id.
\185\ Trussell, J., Leveque, J.A., Koenig, J.D., London, R.,
Borden, S., Henneberry, J., LaGuardia, K., Stewart, F., Wilson, G.,
Wysocki, S., and Strauss, M. (1995). ``The Economic Value of
Contraception: A Comparison of 15 Methods,'' American Journal of
Public Health, available at http://ajph.aphapublications.org/doi/pdf/10.2105/AJPH.85.4.494.
---------------------------------------------------------------------------
The Departments assume that, unlike the initial introduction of
contraceptive coverage requirements under the ACA, these proposed rules
would have small impacts on the fraction of covered women using
contraception, as approximately 70 percent of this population of
covered women that uses contraception already has coverage for
contraception through private insurance without cost sharing.
Nonetheless, in line with the findings of ASPE and others, the
Departments assume that any increase in contraception utilization,
however small, induced by these proposed rules would not increase net
insurer claims costs and thus not increase gross premiums. This effect
is separate from the transfers created by shifting the out-of-pocket
cost burden from the covered individual to the plan, which are
accounted for separately. The Departments request comment on this
analysis.
The Departments also anticipate that the establishment or use of an
existing exceptions process by plans and issuers that would allow
covered individuals to access coverage of certain recommended
preventive services without cost sharing would also lead to a decrease
in out-of-pocket costs for these preventive services and a
corresponding increase in utilization or switching from other
preventive services. The Departments expect that this change would
increase net claims costs initially and potentially over time. Plans
and issuers could experience claims cost savings that at least
partially offset these new costs, due to improved health outcomes
associated with increased utilization of certain recommended preventive
services.
The Departments request comment and data on how the costs to plans
and issuers would change due to a change in utilization of preventive
services associated with these proposed rules.
(2) Costs to Pharmacies and Plans and Issuers To Update Billing
Processes and Systems for Covered OTC Products
The Departments anticipate that pharmacies, as well as plans and
issuers, would incur some upfront and annual operational and
administrative costs in order to comply with the coverage requirements
for OTC contraceptives in these proposed rules, but do not have
information necessary to estimate such costs.
For pharmacies, the Departments anticipate costs would include
updating real-time claims adjudication systems and processes for their
point-of-sale systems. The Departments are aware that there are
uncertainties regarding how pharmacies could adapt existing systems,
including the requirements in some point-of-sale systems to fill in a
``prescriber NPI,'' which would not exist in its usual form for OTC
products. The Departments are aware of at least one large pharmacy
chain that has already implemented insurance coverage for an OTC oral
contraceptive pill at the pharmacy counter by setting up codes for
insurance reimbursement with real-time claim adjudication. The
Departments lack information regarding how widespread such existing
capabilities are among pharmacies and thus the costs of transitioning
systems and processes that do not yet have these
[[Page 85781]]
capabilities.\186\ The Departments request comment on the potential
changes that pharmacies would have to make to their systems and
processes and the corresponding burden and costs.
---------------------------------------------------------------------------
\186\ One analogous example of widespread implementation of
over-the-counter insurance coverage is the recent COVID-19 pandemic
when COVID tests were available over-the-counter at no cost sharing.
See Huber, K., T. Roades, A. Higgins, M. Aspinall, C. Silcox, and M.
McClellan, Duke University Margolis Center for Health Policy,
(2022). ``Over the Counter COVID-19 Testing: Insurance Coverage
Strategies to Support Equitable Access,'' available at https://healthpolicy.duke.edu/sites/default/files/2022-05/Margolis%20OTC%20Testing.pdf. It remains unclear how these
preparations might affect the cost of implementation of these
proposed rules, but it is likely that this prior work may--to some
extent--mitigate costs.
---------------------------------------------------------------------------
The Departments anticipate that plans and issuers would incur costs
associated with updating IT systems and processes to process claims.
Plans and issuers would also have to develop, if they have not already,
processes aimed at preventing fraud, waste, and abuse for OTC products,
which could include processes to monitor utilization. Plans and issuers
routinely do such monitoring for prescription products in order to, for
example, enforce reasonable quantity limits. The Departments request
comment on the costs and any associated burden that would be borne by
plans and issuers to update their systems and processes.
The Departments do not anticipate significant costs associated with
formulary redesign to accommodate OTC products, as formularies are
regularly updated even in the absence of any relevant policy changes
and plans and issuers are already required to cover OTC products
without cost sharing when the patient has a prescription. For the same
reason, the Departments do not anticipate significant costs associated
with formulary redesign to comply with the provision of the proposed
rules requiring coverage of every recommended contraceptive drug and
drug-led combination product without cost sharing unless a therapeutic
equivalent is covered without cost sharing.
The Departments also anticipate some costs to pharmacies, as well
as plans and issuers, associated with negotiating new contract terms
for OTC coverage.
Despite the costs to pharmacies identified in this section, the
Departments anticipate that pharmacies would see increased revenues
from sales of covered OTC contraceptives, and that associated profit
increases (if they occur) might offset these costs from the pharmacies'
perspective.
The Departments request comment on the potential costs (and
revenues) to pharmacies and costs to plans and issuers associated With
the changes in these proposed rules.
(3) Potential Administrative Costs to Plans and Issuers Associated With
the Establishment or Use of an Existing Exceptions Process
Plans and issuers could incur administrative costs associated with
the establishment or use of an existing exceptions process that allows
an individual to receive coverage without cost-sharing requirements for
a medically necessary recommended preventive service. The Departments
assume that most plans and issuers have an exceptions process in place
that they would be able to adapt for the provision in these proposed
rules. However, those that do not would incur costs to develop one. The
Departments do not have information about the percentage of plans and
issuers that currently have an exceptions process in place that could
be adapted for the provision in these proposed rules or the upfront and
recurring costs that plans and issuers would incur to establish one.
The Departments request comment on the potential costs to plans and
issuers associated with this provision.
(4) Costs to Issuers and TPAs (on Behalf of Self-Insured Group Health
Plans) Associated With the Disclosure of Coverage and Cost-Sharing
Requirements for OTC Contraceptive Items
As detailed in section IV.D of this preamble, issuers and
TPAs,\187\ on behalf of self-insured group health plans, would incur
costs associated with the disclosure of coverage and cost-sharing
requirements for OTC contraceptive items. Specifically, issuers and
TPAs would incur one-time costs of $35,089,261 to integrate the
contraception statement language into the existing Transparency in
Coverage internet-based self-service tool,\188\ and to create or update
a web page to provide information about coverage of contraceptive items
and services. Additionally, issuers and TPAs would incur annual costs
of $6,091,096 for programming updates, web page maintenance, training
customer service representatives, and responding to calls to provide
assistance. These costs would ultimately be incurred by plans and
issuers and, in turn, by covered individuals through a minimal impact
on premiums. The Departments request comment on the costs to issuers
and TPAs associated with this provision.
---------------------------------------------------------------------------
\187\ The Departments assume that fully-insured group health
plans would depend on health insurance issuers and self-insured
group health plans would rely on TPAs to implement the proposed
requirements. The Departments expect self-insured group health plans
would compensate TPAs accordingly and thereby bear any
implementation costs.
\188\ The Departments expect that while participants,
beneficiaries, and enrollees will continue to request cost-sharing
information on paper in certain circumstances, the proposed
additional disclosure would impose negligible additional burden on
plans and issuers as the disclosure will likely be no more than one
or two sentences and would only be required when a participant,
beneficiary, or enrollee requests cost-sharing information for a
subset of covered items and services, covered contraceptive items
and services.
---------------------------------------------------------------------------
e. Transfers
Eliminating cost sharing for some contraceptive items has the
potential to affect transfers associated with contraceptive items and
insurance coverage. Specifically, the Departments expect these proposed
rules would result in transfers from plans and issuers to covered
individuals resulting from reduced out-of-pocket costs for
contraceptive items, which are estimated to be mostly paid by covered
individuals experiencing higher premiums, with a smaller portion paid
by the Federal government through premium tax credit (PTC) spending.
The Departments also expect these proposed rules would result in
transfers from plans and issuers (and potentially premium-payers and
the Federal government) to pharmacies, drug wholesalers, and drug
manufacturers resulting from anticipated shifts in formulary design and
utilization management that could affect plan-paid prices for some
contraceptive items. Lastly, the Departments expect these proposed
rules would result in transfers associated with the use of an
exceptions process for covered individuals to access coverage without
cost sharing of certain recommended preventive services but are unable
to quantify the magnitudes of these transfers due to a lack of data, as
discussed later in this section.
(1a) Transfers From Plans and Issuers to Covered Individuals Resulting
From Reduced Out-of-Pocket Costs for Contraceptive Items
The Departments expect that the proposed elimination of cost
sharing for a wider variety of contraceptive items would lead to
transfers from plans and issuers to covered individuals due to reduced
out-of-pocket spending on contraceptive services. (Analysis of who
ultimately pays these transfers is presented in the next sub-section.)
These transfers would accrue to covered individuals who are women of
reproductive age, who use a contraceptive method, who--in the
[[Page 85782]]
absence of the proposed changes--would otherwise pay some non-zero
cost-sharing amount for contraceptives, and whose out-of-pocket costs
would be reduced by these proposed rules. As per the calculation in
section IV.B.2.b of this preamble, approximately 15.2 million
individuals (8.4 percent of individuals in covered plans) are women of
reproductive age using those noted forms of contraceptives. The 2022
KFF Women's Health Survey showed that among privately-insured women
using contraception, 70 percent reported that insurance covered their
contraceptive method with no cost sharing, and 16 percent reported that
insurance paid some but not all of the cost.\189\ The remaining 13
percent of respondents paid out-of-pocket despite being insured,
believed contraception not to be covered by insurance, or replied in
some other way.\190\
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\189\ Frederiksen, B, Ranji, U., Long, M., Diep, K., and
Salganicoff, A., KFF (2022). ``Contraception in the United States: A
Closer Look at Experiences, Preferences, and Coverage,'' available
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings/.
\190\ The Departments note that studies of out-of-pocket
spending for contraception based on examination of health care
claims cannot speak to the issue of an insured woman not making use
of insurance for a contraceptive purchase--a case that would not
generate an insurance claim.
---------------------------------------------------------------------------
In terms of consumer response, lack of knowledge about plan
benefits and features as well as preference for non-covered
contraceptive items (for example, a branded drug in the presence of a
generic drug with no cost sharing) may explain some of the incomplete
take-up of zero cost-sharing options under the status quo, and such
frictions and preferences might persist to some degree under the
proposed rules.
Therefore, the Departments assume that--as under the status quo--
some covered women would continue to pay out-of-pocket for
contraceptives, including by not using insurance when insurance could
cover some or all of the out-of-pocket costs. The Departments
operationalize this assumption by assuming that the 16 percent of women
who currently use insurance but face non-zero cost sharing due to
partial insurance coverage would instead face zero cost sharing under
these proposed rules, while the 13 percent \191\ of contraceptive users
who are insured but do not use insurance coverage for their
contraceptive items would continue to not use insurance coverage.\192\
The Departments estimate that among the subset of covered individuals
for whom contraceptives are covered with non-zero cost sharing (16
percent of contraceptive users and therefore estimated to be
approximately 1.3 percent of the total covered population) \193\ these
proposed rules would decrease average cost sharing by a maximum of $316
per year.\194\ Therefore, the Departments estimate a total transfer of
approximately $768.7 million per year to contraceptive users in the
form of reduced out-of-pocket payments.\195\
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\191\ This is the sum of the 6 percent of users whose plan does
not cover contraception, the 4 percent of users who reported
``Other,'' and the 3 percent of users who had coverage but did not
use it. The Departments note that these proposed rules could induce
this final category of users to switch to a covered OTC method, but
the Departments do not assume this is the case.
\192\ Frederiksen, B, Ranji, U., Long, M., Diep, K., and
Salganicoff, A., KFF (2022). ``Contraception in the United States: A
Closer Look at Experiences, Preferences, and Coverage,'' Fig. 14,
available at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings.
\193\ 8.4 percent of covered individuals are women of
reproductive age who are currently using contraception, and 16
percent of these women face some out-of-pocket costs for
contraception = 1.3 percent.
\194\ The Departments calculate the typical monthly out-of-
pocket costs for those individuals who use insurance but pay a non-
zero amount by estimating a weighted average of out-of-pocket
amounts as reported in the KFF survey: 24 percent reporting $50 or
more, 13 precent reporting $25-$49, 19 percent reporting $15-$24, 26
percent reporting $5-$14, and 6 percent reporting $1-$4, and 12
percent reporting ``Don't know.'' Taking midpoints of these ranges,
assuming a $50 monthly payment for the top category, and excluding
individuals who report ``don't know'' yields $26.29 per month
(=((.24*50)+(.13*37)+ (0.19*19.5)+(.26*9.5)+(.06*2.5))/(1-.12)) or
$315.50 annually. The Departments assume that the estimated 16
percent of covered women with partial coverage would face zero cost
sharing under these proposed rules, while the remaining 14 percent
of covered women, who currently do not report using insurance for
contraceptives, would not experience a significant decline in out-
of-pocket costs.
\195\ Approximately 1.3 percent of the covered population
(approximately 181.4 million individuals) times a $316 reduction in
out-of-pocket costs = $768.7 million.
---------------------------------------------------------------------------
(1b) Transfers From Covered Individuals and From the Federal Government
to Plans and Issuers in the Form of Higher Premiums (Analysis of Who
Pays for the Transfers Estimated Above)
The Departments assume these proposed provisions would cause plans
and issuers to increase premiums to approximately offset the new net
costs incurred by lower cost sharing. In other words, the Departments
assume the cost of decreased cost sharing would be passed on to premium
payers. From a total decline in out-of-pocket payments of $768.7
million per year, the Departments estimate that these proposed rules
would increase annual gross premiums by about $4.24 per covered
individual or less than 0.1 percent.\196\ Premium payers include
employer plan participants--both directly through employee
contributions to premiums and indirectly by reductions in salary
compensation or other benefits--and individuals purchasing plans
outside of the employment context (on or off an Exchange). Because
these proposed provisions would increase the cost of employer-sponsored
insurance and reduce the share of total compensation subject to
taxation, the Departments estimate these changes would reduce Federal
tax revenue by $217 million annually. Because these proposed provisions
are expected to increase gross premiums for individual health insurance
coverage purchased on the Exchanges, the Departments estimate and
anticipate an $83.1 million annual increase in net Federal premium tax
credit (PTC) spending.\197\ The annual Federal budgetary transfers
would therefore amount to an estimated $300.1 million ($217 million
reduction in Federal tax revenue plus $83.1 million increase in net
Federal PTC spending).
[[Page 85783]]
The remainder of the estimated $768.7 million in annual transfers, or
approximately $468.6 million ($768.7 million minus $300.1 million), is
expected to be paid by covered participants and enrollees (directly or
indirectly, as discussed earlier in this section) through increased
premiums paid to plans and issuers and subsequent reductions to
employees' taxable wages. However, the Departments acknowledge that
employers could also offset plan or coverage cost increases through
increased prices for consumers, reduced production costs (for example,
layoffs, other reductions to labor costs, or other production cost
reductions), or lower profits, for example. The Departments request
comment on and evidence regarding the extent to which new net costs
incurred by lower cost sharing for contraceptive items would be passed
along to covered individuals through increases in premiums.
---------------------------------------------------------------------------
\196\ Approximately $768.7 million in new plan costs divided
across 181.4 million covered individuals = $4.24 in annual premiums.
Of the 181.4 million covered individuals, the CMS 2023 Open
Enrollment Report indicates there are 16.4 million consumers
enrolled in health insurance plans purchased through an Exchange and
that the average annual premium for single coverage for Exchange
coverage is $7,260 ($605 per individual per month). The Departments
assume that the average annual premium for off-Exchange single
coverage would be comparable to this figure. 2023 KFF data indicate
that the average annual premium for (single) group comprehensive
insurance is $8,435. The Departments assume that the average annual
premium for (single) non-Federal government plan coverage would be
comparable to this figure. Based on these figures and assumptions,
the weighted average annual premium would be expected to increase by
about 0.05 percent. See CMS, ``Health Insurance Marketplaces 2023
Open Enrollment Report,'' available at https://www.cms.gov/files/document/health-insurance-exchanges-2023-open-enrollment-report-final.pdf and KFF, ``2023 Employer Health Benefits Survey,''
available at https://www.kff.org/health-costs/report/2023-employer-health-benefits-survey.
\197\ The Departments have estimated this net Federal spending
transfer effect by assuming that the expected $4.24 increase in
annual gross premiums will apply to the second-lowest-cost silver
plans in each market, and that each dollar of increased silver plan
premiums generates exactly a dollar of additional net Federal PTC
spending for individuals receiving PTCs. A $4.24 increase in per
capita annual gross premiums, times 21,310,538 Exchange annual
enrollees (as reported above), times 92 percent of enrollees
receiving PTCs, equals approximately $83.1 million. This estimate
does not account for the expiration of the enhanced PTC subsidies at
the end of 2025, which would likely reduce the level of Exchange
enrollment (or at least reduce enrollment growth), reduce the share
of enrollees receiving PTCs, and therefore reduce net Federal PTC
spending. Source of fraction receiving PTCs: Effectuated Enrollment:
Early 2024 Snapshot and Full Year 2023 Average, available at https://www.cms.gov/files/document/early-2024-and-full-year-2023-effectuated-enrollment-report.pdf.
---------------------------------------------------------------------------
(2) Transfers Associated With the Use of an Exceptions Process
The Departments anticipate that the increased access to coverage
without cost sharing of other recommended preventive services through
the use of an exceptions process would generate transfers caused by
reduced out-of-pocket costs for other recommended preventive services
for which coverage without cost sharing would be accessible through an
exceptions process.
More specifically, the Departments anticipate that the increased
access to coverage without cost sharing of other preventive services
through the use of an exceptions process would generate transfers; on
an intermediate basis, they would flow from plans and issuers to
covered individuals, but these transfers are expected to be ultimately
paid by a combination of other covered individuals, experiencing higher
premiums, and by the Federal government in the form of higher net
Federal PTC spending for Exchange plans caused by higher premiums
(approximately equal in size to the total reduction in out-of-pocket
costs for other preventive services for which coverage without cost
sharing would be accessible through the use of an exceptions process).
It is uncertain how plan and issuer expenditure would change due to
use of an exceptions process to allow covered individuals to access
coverage of recommended preventive services without cost sharing. The
Departments do not have data that would allow for a quantification of
these effects. The Departments request comment on the transfers
associated with the exceptions process and their likely magnitudes.
(3) Potential Transfers From Plans and Issuers to Pharmacies, Drug
Wholesalers, and Drug Manufacturers Resulting From Anticipated Shifts
in Formulary Design That Could Affect Plan-Paid Prices for Some
Contraceptive Items
These proposed rules would require plans and issuers to cover a
wider range of recommended contraceptive items without cost sharing.
This is likely to affect the relative price negotiating power between
entities in the drug supply chain (manufacturers, wholesalers, and
pharmacies) and plans and issuers, including their affiliated or
subcontracted PBMs. This could lead to higher negotiated prices to
plans, issuers, and their PBMs. If so, it would increase total plan
costs for recommended contraceptive items and would ultimately cause
increases in plan premiums.
Plans and issuers place downward pressure on negotiated prices for
drugs and devices and limit spending in several ways: \198\ through the
threat of exclusion of a product from a drug formulary; through the
threat of setting high consumer cost sharing that would steer covered
individuals away from high cost or ineffective products; and through
the threat of erecting non-price barriers to access, such as prior
authorization, step-therapy, or requirements for a provider-requested
exception to access a product.\199\ Plans and issuers also place
downward pressure on negotiated prices for drugs and devices and limit
spending by contracting with providers whose prescribing patterns align
with the cost-control goals of the plans and issuers.
---------------------------------------------------------------------------
\198\ For a useful overview of the management tools employed by
managed care organizations, see Glied, S., National Bureau of
Economic Research (1999), ``Managed Care,'' available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=202746.
\199\ Lakdawalla, D. and Yin, W., National Bureau of Economic
Research (2009). ``Insurer Bargaining and Negotiated Drug Prices in
Medicare Part D,'' available at https://www.nber.org/papers/w15330;
Lakdawalla, D.N. (2018). ``Economics of the Pharmaceutical
Industry,'' Journal of Economic Literature, available at https://www.aeaweb.org/articles?id=10.1257/jel.20161327.
---------------------------------------------------------------------------
Because drug and device suppliers desire favorable coverage and
favorable provider prescribing behavior in order to attract higher
volumes of covered individuals to use their products, these tools place
powerful downward pressures on negotiated (net-of-rebate) prices paid
by plans. Research has shown that when plans and issuers are unable to
use cost sharing, they rely on non-price barriers to access, such as
prior authorization and step therapy, to steer consumers across
medication options, and ultimately constrain overall plan costs.\200\
---------------------------------------------------------------------------
\200\ See Geruso, M., Layton, T., and Prinz, D. (2019).
``Screening in Contract Design: Evidence from the ACA Health
Insurance Exchanges,'' American Economic Journal: Economic Policy,
available at https://www.aeaweb.org/articles/pdf/doi/10.1257/pol.20170014 (finding that when plans are limited in their ability
to expose their enrollees to cost-sharing, as with cost-sharing-
reduction enrollees in Exchange plans, plans may respond by relying
more heavily on non-price barriers to access, such as step-therapy
and prior authorization).
---------------------------------------------------------------------------
The provisions of these proposed rules would clarify the use of
reasonable medical management that plans and issuers can use with
respect to covering recommended preventive services, including
contraceptive items, without cost sharing under the ACA. This
clarification could impact their bargaining power against drug
suppliers, removing some sources of downward pressure on prices. The
Departments do not have sufficient data to estimate the magnitude of
these effects. The Departments anticipate that they are unlikely to be
significant for contraceptive products for which there are available
therapeutic equivalents. For such products, competition across two or
more therapeutic equivalents is a key constraint on prices even in the
absence of cost sharing and other plan and issuer tools. The
Departments anticipate that price effects could be larger for products
for which there is no therapeutic equivalent. The Departments request
comment and data regarding these potential transfers.
f. Uncertainty
As noted throughout this RIA, due to a lack of data and
information, there are several areas of uncertainty regarding the
potential impacts of these proposed rules. The Departments are unable
to forecast with high confidence how the provisions of these proposed
rules would affect the choice of contraceptive method or product among
covered women or how many covered women would continue to use
contraceptives with non-zero cost sharing. Further, the Departments are
unable to forecast with high confidence whether or the extent to which
the pharmaceutical and medical device supply chain entities (including
manufacturers, wholesalers, and pharmacies) might respond in pricing
negotiations with PBMs and issuers to both the new patterns of consumer
take-up of contraceptive items--as the set of options without cost
sharing would expand under these proposed rules--and to the provisions
of these proposed
[[Page 85784]]
rules that would clarify plans' and issuers' ability to use reasonable
medical management. As a result, there is some uncertainty about the
potential impact on premiums.
The Departments expect that the administrative and operational
costs associated with these proposed rules would primarily fall on
plans, issuers, and pharmacies. As discussed in section IV.B.2.d of
this preamble and discussed in comments in response to the OTC
Preventive Products RFI, these entities would incur costs associated
with updating IT systems and processes to accommodate insurance
coverage of OTC contraceptives. Commenters noted that various systems
would likely need to be updated or created, such as to accommodate new
information requirements for claims, but provided no further
information related to any associated burdens or costs. Therefore, the
Departments lack information on the scope and size of such activities
and costs.
The Departments are uncertain about the number of women who would
switch contraceptive methods to OTC contraceptives as a result of these
proposed rules. Since the first FDA-approved daily OTC oral
contraceptive pill was approved in July 2023 and became widely
available for purchase (including by being carried by major pharmacy
chains and online retailers) beginning in March 2024, it is too soon to
predict with confidence the extent of switching to an OTC contraceptive
from other prescription products.
A reasonable analog to daily OTC oral contraception is the
increased use of emergency contraception since its approval for OTC use
in the early 2000s. The FDA approved nonprescription availability of
emergency contraception (Plan B) for women 18 years or older in August
2006.\201\ This was expanded to women 17 years and older in 2009 and
without age restrictions in 2013. The Guttmacher Institute reports that
between 2008 and 2015, the use of emergency contraceptive pills
increased significantly across nearly all social and demographic
groups.\202\ For example, the report shows that use among 25-29-year-
olds more than doubled during this time, increasing from 16 percent of
women ever having used emergency contraception to 36 percent. While
these data do not allow us to forecast switching from prescription to
OTC birth control, they do suggest that take-up of OTC contraceptive
items may increase.
---------------------------------------------------------------------------
\201\ FDA, Center for Drug Evaluation and Research, ``Plan B
One-Step Information,'' available at https://www.fda.gov/drugs/postmarket-drug-safety-information-patients-and-providers/plan-b-one-step-15-mg-levonorgestrel-information.
\202\ Guttmacher Institute (2021). ``Use of Emergency
Contraception in the United States,'' available at https://www.guttmacher.org/fact-sheet/use-emergency-contraception-united-states.
---------------------------------------------------------------------------
There is also insufficient data to forecast the extent to which
take-up of OTC oral contraception would result in fewer visits to
health care providers and the scope for potential negative health
consequences due to this reduction in contact with health care
providers. Research finds that fewer primary care visits may lead to
less interaction with preventive care services such as mammograms,
vaccinations, and colonoscopies, and may result in more emergency room
visits and hospitalizations, all of which could lead to greater health
care expenditures in the future.\203\ However, the same work finds that
the likelihood of preventive services uptake does not increase with
respect to the number of visits, suggesting that while increased
engagement with primary care improves compliance with these preventive
interventions, the benefits of visits may diminish in value past a
certain frequency.\204\ Applied to this uncertain setting, this body of
research suggests a possibility that covering recommended OTC
contraceptive items without cost sharing and without a prescription
could be associated with negative health consequences if it leads to a
reduction in provider visits that specifically reduces interaction with
preventive services. However, there is no evidence to suggest that such
a policy to increase coverage of recommended OTC contraceptive items
would affect the strong incentives for women to continue to seek
preventive care, via a provider visit, outside of their need to obtain
a prescription for contraception. Among these incentives, the ACA
requires plans and issuers to cover, without cost sharing, an annual
well-woman visit as well as other recommended preventive services.
---------------------------------------------------------------------------
\203\ Rose, A.J., Timble, J.W., Setoldji, C., Friedberg, M.W.,
Malsberger, R., and Kahn, K.L. (2019). ``Primary Care Visit
Regularity and Patient Outcomes: an Observational Study,'' Journal
of General Internal Medicine, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6318173 and Hostetter, J.,
Schwarz, N., Klug, M., Wynne, J., and Basson, M.D. (2020), ``Primary
Care Visits Increase Utilization of Evidence-Based Preventative
Health Measures,'' BMC Family Practice, available at https://bmcprimcare.biomedcentral.com/articles/10.1186/s12875-020-01216-8.
\204\ Gao, J., Moran, E., Grimm, R., Toporek, A., Ruser, C.
(2022). ``The Effect of Primary Care Visits on Total Patient Care
Cost: Evidence from the Veterans Health Administration,'' Journal of
Primary Care Community Health, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9793026 (examining the
correlation between additional in-person primary care visits and
total health care costs among Veterans Health Administration
patients and finding that the first visit was associated with the
largest savings, with diminishing returns for subsequent visits).
---------------------------------------------------------------------------
Further, there is significant uncertainty about the potential
changes in take-up of OTC contraceptives that would be caused by these
proposed rules and the impact of any such change on the frequency of
provider visits. In a survey about hypothetical use that predated the
introduction of an FDA-approved daily OTC oral contraceptive pill, many
female respondents indicated they would be likely to switch to an OTC
contraceptive if it was available to them.\205\ Women may be motivated
to make such a switch by the potential reduction in required provider
visits to maintain a prescription. The costs of seeing a provider
include costs such as transportation and childcare during the
appointment time, or the opportunity costs of time associated with the
visit. If these proposed rules reduce the frequency or likelihood of
health care provider visits among women, the revenue of providers who
otherwise would have performed and billed for services would be
impacted, representing a cost of at least $100 per visit, on
average.\206\
---------------------------------------------------------------------------
\205\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and
Salganicoff, A., KFF (2022). ``Contraception in the United States: A
Closer Look at Experiences, Preferences, and Coverage,'' available
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings (finding that 60 percent of reproductive age females who
have used birth control pills in the past 12 months said they would
be likely or very likely to use over-the-counter birth control
pills).
\206\ In 2016, the average cost per visit to a primary care
physician was $106 compared to $103 for an office visit to a NP or
PA. See Hargraves, J., Frost A. (2018). ``HCCI Brief: Trends in
Primary Care Visits,'' available at https://healthcostinstitute.org/hcci-originals-dropdown/all-hcci-reports/trends-in-primary-care-visits.
---------------------------------------------------------------------------
Nonetheless, practical considerations surrounding OTC contraceptive
items may limit the number of covered individuals who take up this
option in practice. First, contraceptives have numerous side effects,
which vary by person and product.\207\ Women are likely to have a
preference for a given contraceptive they have already become
accustomed to; in this case, they may perceive switching as involving
some risk of generating a worse match.\208\ A
[[Page 85785]]
commenter to the OTC Preventive Products RFI noted these considerations
in explaining why the extent of switching to OTC products would likely
be moderate.
---------------------------------------------------------------------------
\207\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and
Salganicoff, A., KFF (2022). ``Contraception in the United States: A
Closer Look at Experiences, Preferences, and Coverage,'' available
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings.
\208\ Switching oral contraceptives can increase the chance of
pregnancy and can often cause side effects. See Lesnewski, R.,
Prine, L., and Ginzburg, R. (2011). ``Preventing Gaps When Switching
Contraceptives,'' American Family Physician Journal, available at
https://www.aafp.org/pubs/afp/issues/2011/0301/p567.html and
Burgess, L. (2023). ``How to Switch Birth Control Pills Properly,''
Medical News Today, available at https://www.medicalnewstoday.com/articles/322356.
---------------------------------------------------------------------------
One way to understand how important such factors may be is to
examine the experience with pharmacist-prescribed contraceptives. As of
2023, 28 states and the District of Columbia allowed pharmacists to
provide contraceptives, 21 of which do not require any physician
follow-up.\209\ However, less than 10 percent of women currently opt to
take advantage of pharmacist provision.\210\ Some women may be unaware
of this option, while others might find that the added convenience may
not be enough to offset a significant preference towards consulting
with a physician and obtaining a prescription for contraception. There
are several considerations that may explain this preference: first,
most women (73 percent) see a family or internal medicine doctor as
their usual source of care.\211\ Thus, it is likely that many women are
prescribed birth control through their primary care physician (PCP),
and that these visits are likely to continue on a semi-regular basis
regardless of how birth control is obtained.\212\ Next, practitioners
are able to renew birth control pills over the phone or via
telemedicine applications, eliminating the net potential benefit of
reducing follow-up visits by switching to an OTC pill. Finally, some
women currently procure contraception from a clinical visit that does
not include a significant medical exam, thus lowering the health
benefit of such a provider interaction (other than its prescribing
function)--in contrast to other visit types with PCPs. Therefore,
despite the potential time and money savings of forgone visits that
would be enabled by wider OTC contraceptive coverage without cost
sharing, this evidence suggests these factors may not significantly
impact the use of recommended preventive services.
---------------------------------------------------------------------------
\209\ Guttmacher Institute (2023). ``Pharmacist-Prescribed
Contraceptives,'' available at https://www.guttmacher.org/state-policy/explore/pharmacist-prescribed-contraceptives.
\210\ The 2022 KFF Women's Health Survey finds that 8 percent of
women ages 18-49 get their birth control from places other than the
doctor's office, a clinic, or online, where ``other'' includes
pharmacies. When asked about where women would prefer to get their
birth control, only 12 percent said ``other''. See Frederiksen, B.,
Ranji, U., Long, M., Diep, K., and Salganicoff, A., KFF (2022).
``Contraception in the United States: A Closer Look at Experiences,
Preferences, and Coverage,'' available at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings.
\211\ Long, M., Frederickson, B., Ranji, U., and Salganicoff A.,
KFF (2020). ``Women's Health Care Utilization and Costs: Findings
from the 2020 KFF Women's Health Survey,'' available at https://www.kff.org/womens-health-policy/issue-brief/womens-health-care-utilization-and-costs-findings-from-the-2020-kff-womens-health-survey/.
\212\ Frederiksen, B., Ranji, U., Long, M., Diep, K., and
Salganicoff, A., KFF (2022). ``Contraception in the United States: A
Closer Look at Experiences, Preferences, and Coverage,'' available
at https://www.kff.org/report-section/contraception-in-the-united-states-a-closer-look-at-experiences-preferences-and-coverage-findings.
---------------------------------------------------------------------------
Informed by the existing research discussed in this section, the
Departments anticipate approximately no impact of the proposed rules on
the frequency of recommended preventive services visits with PCPs,
nurse practitioners, or physician assistants, and thus approximately no
impact on health outcomes of covered women through this channel.
Similarly, the Departments anticipate approximately no impact of the
proposed rules on revenues of these health care providers. The
Departments note that although the option of switching to OTC
contraception may not provide significant value to all contraceptive
users, the option may provide particularly high value for the subset of
covered women in contraception deserts. The Departments request comment
on this analysis.
Finally, the Departments acknowledge the potential for long-term
economic effects of increased coverage of certain recommended
preventive services. Research suggests that access to contraception can
increase educational attainment and labor force participation, for
example, with follow-on potential to improve career outcomes and
lifetime earnings.\213\ It is also possible that overall health
outcomes might improve because of increased coverage of certain
recommended preventive services, which, in turn, could reduce health
care expenditures and therefore premiums in the future. Further long-
term economic effects could be seen by entities and individuals
directly or indirectly (public health insurance programs, uninsured or
self-pay individuals, and suppliers in the pharmaceutical industry, for
example) affected by these proposed rules, to the extent that prices
for different recommended preventive services change as a result of
these proposed rules. However, due to a lack of data and clear
understanding of how preventive services utilization will evolve given
these proposed rules, the Departments are unable to develop monetized
estimates of these potential benefits, costs, and transfers.
---------------------------------------------------------------------------
\213\ See, e.g., Bernstein, A. and Jones, K.M. (2019). ``The
Economic Effects of Contraceptive Access: A Review of the
Evidence,'' Institute for Women's Policy Research, available at
https://iwpr.org/wp-content/uploads/2020/07/B381_Contraception-Access_Final.pdf.
---------------------------------------------------------------------------
Due to the lack of data, the Departments are unable to develop
monetized estimates of the benefits to covered individuals anticipated
to arise from these proposed rules, including a potential reduction in
unintended pregnancies and improved health outcomes for individuals and
greater flexibility in utilizing a wider range of recommended
preventive services without cost sharing for eligible individuals.
g. Regulatory Review Cost Estimation
Due to the uncertainty involved with quantifying the number of
entities that will review these proposed rules, the Departments assume
that the total number of unique entities that may review these proposed
rules will equal the number of health insurance companies (479) plus
the number of TPAs (205) (on behalf of self-insured group health plans)
plus the States, Territories, and Washington DC (56) plus the number of
unique commenters (364) to the OTC Preventive Products RFI.\214\ That
sum yields 1,104 unique entities. The Departments acknowledge that this
assumption may understate or overstate the number of reviewers and
therefore the costs of reviewing these proposed rules. The Departments
request comment on the approach in estimating the number of entities
which will review these proposed rules.
---------------------------------------------------------------------------
\214\ See 88 FR 68519 (Oct. 4, 2023).
---------------------------------------------------------------------------
Using the median wage information from the BLS for business
operations specialist (13-1199) to account for labor costs (including a
100 percent increase to account for the cost of fringe benefits and
other indirect costs), the Departments estimate that the cost of
reviewing this rule is $76.52 per hour, including overhead and fringe
benefits.\215\ Assuming an average reading speed of 200 words per
minute, the Departments estimate that it would take approximately 3.25
hours for the staff to review these proposed rules. For each entity
that reviews the rule, the estimated cost is $248.69 (3.25 hours x
$76.52). Therefore, the Departments estimate that the total cost of
reviewing this regulation is approximately $274,554 ($248.69 x 1,104).
---------------------------------------------------------------------------
\215\ BLS, ``May 2023 National Occupational Employment and Wage
Estimates, United States,'' available at https://www.bls.gov/oes/current/oes_nat.htm.
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[[Page 85786]]
C. Regulatory Alternatives--Departments of Health and Human Services
and Labor
In developing these proposed rules, the Departments considered
various alternative approaches.
The Departments considered proposing to require plans and issuers
to cover all recommended preventive services, with no cost sharing and
without applying reasonable medical management techniques. However, as
discussed in section II.A of this preamble, the Departments have
determined that allowing plans and issuers to utilize reasonable
medical management techniques, when paired with requirements to provide
an exceptions process, as proposed in these rules, strikes an
appropriate balance between the statutory requirement that plans and
issuers cover recommended preventive services at no cost and the
importance of allowing plans and issuers to impose reasonable
limitations in order to contain costs (including costs that would be
passed on to consumers in the form of increased premiums) and promote
efficient delivery of care. The provision of an easily accessible,
transparent, and sufficiently expedient exceptions process that is not
unduly burdensome on the individual or a provider (or other person
acting as the individual's authorized representative) would ensure that
covered individuals can access coverage of medically necessary
recommended preventive services without cost sharing even if such
services are typically not covered or are otherwise subject to
reasonable medical management techniques.
With respect to the proposal to require plans and issuers utilizing
reasonable medical management techniques to provide an easily
accessible, transparent, and sufficiently expedient exceptions process
that is not unduly burdensome, the Departments considered limiting this
proposal to contraceptive items only or to a subset of recommended
preventive services rather than to all preventive services. However,
the Departments concluded that an exceptions process should be required
for all recommended preventive services in order to fully implement the
requirements under section 2713 of the PHS Act to ensure that plans and
issuers provide coverage of recommended preventive services without
cost-sharing requirements, consistent with prior guidance. Without such
a process, individuals could be forced to pay out-of-pocket or forego
the medically necessary form of a recommended preventive service if it
differs from the form covered by their plan or issuer. While prior
guidance has generally focused on the use of an exceptions process in
the context of contraceptive coverage, it has not been exclusively
limited to that context, nor are the Departments aware of any legal or
policy reason for limiting applicability of an exceptions process to
one or a subset of recommended preventive services. Therefore, the
Departments determined it was appropriate to propose that a plan or
issuer would be required to provide an exceptions process with respect
to any recommended preventive service for which it utilizes medical
management techniques in order for such techniques to be considered
reasonable.
The Departments considered whether to propose to require plans and
issuers to provide coverage without cost sharing of all or a subset of
recommended OTC preventive products. The Departments similarly
considered whether to propose that the therapeutic equivalence approach
be applicable to all or some broader subset of recommended preventive
services that are drugs and drug-led combination products, rather than
only to contraceptive drugs and drug-led combination products. However,
the Departments decided to take an incremental approach, beginning
first with recommended contraceptive items. As discussed in section
II.A.2 of this preamble, section 2713 of the PHS Act and its
implementing regulations do not exclude from their coverage requirement
coverage of OTC recommended preventive services. However, in
consideration of comments in response to the OTC Preventive Products
RFI cautioning against swift implementation of a coverage requirement
for all OTC preventive products, the Departments determined it would be
advisable to propose an initial implementation of such a requirement,
applicable only to recommended OTC contraceptive items. Similarly, the
Departments are of the view that it is advisable to initially propose
to require the use of a therapeutic equivalence approach for the same
set of recommended preventive services--that is, to contraceptive drugs
and drug-led combination products--as in prior guidance. This
incremental approach to coverage, with respect to recommended OTC
contraceptive items and therapeutic equivalence, would provide plans
and issuers, providers, retailers, and other interested parties with
the opportunity to gather implementation data before the Departments
determine whether additional guidance or rulemaking is appropriate.
Further, for the reasons outlined in sections I and II.A of this
preamble, it is particularly necessary to support access to
contraceptive items at this time.
With respect to the Departments' effort to ensure individuals are
made aware that OTC contraceptive items are covered without cost
sharing and without a prescription, the Departments also considered
proposing to require plans and issuers to create a public-facing web
page with comprehensive information about their contraceptive coverage
policy, including related to therapeutic equivalents, exceptions
processes, network information, and OTC coverage. However, the
Departments understand that at least some group health plans do not
maintain a website for employee health benefit plans, and the
Departments believe more information is needed to assess whether it
would be feasible for plans and issuers to provide information about
contraceptive coverage on a public website in cases where they do not
maintain such a website, such as by entering into a written agreement
under which a plan's health insurance issuer or TPA, as applicable,
posts the information on its public website where information is
normally made available to participants, beneficiaries, and enrollees,
on the plan's behalf. The Departments also considered proposing to
require the statement to include more information about coverage of
therapeutic equivalents and requested comment on this approach, given
the Departments' desire to maximize the statement's effectiveness by
keeping it brief, and that therapeutic equivalent coverage policies
will not differ between plans and thus a plan-specific disclosure may
be less essential.
The Departments also considered proposing to require that
information about coverage of OTC contraceptive items without cost
sharing and without a prescription be included on SBCs. However, due to
the space limitations, the Departments are concerned that the SBC would
not provide a sufficiently robust disclosure. The Departments decided
to seek comment on the SBC's utility for informing participants,
beneficiaries, and enrollees of coverage of OTC contraceptive items
without cost sharing and without a prescription.
D. Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA), the Departments
are required to provide 60-day notice in the Federal Register and
solicit public comment before a collection of information requirement
is submitted to OMB for review and approval. To fairly
[[Page 85787]]
evaluate whether an information collection should be approved by OMB,
section 3506(c)(2)(A) of the PRA requires that the Departments solicit
comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of an agency.
The accuracy of the Departments' estimate of the
information collection burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
As part of the continuing effort to reduce paperwork and respondent
burden, the Departments conduct a preclearance consultation program to
provide the general public and Federal agencies with an opportunity to
comment on proposed and continuing collections of information in
accordance with the PRA. This helps to ensure that the public
understands the Departments' collection instructions, respondents can
provide the requested data in the desired format, reporting burden
(time and financial resources) is minimized, collection instruments are
clearly understood, and the Departments can properly assess the impact
of collection requirements on respondents. Under the PRA, an agency may
not conduct or sponsor, and an individual is not required to respond
to, a collection of information unless it displays a valid OMB control
number.
The Departments have submitted a copy of these proposed rules to
OMB in accordance with 44 U.S.C. 3507(d) for review of the proposed
(revised) information collections described in this section. The
Departments request public comment on these information collections.
Commenters may submit their comments on the Departments' PRA analysis
in the same way they send comments in response to this NPRM as a whole
(for example, through the https://www.regulations.gov website),
including as part of a comment responding to the broader NPRM. To
obtain copies of the supporting statements and any related forms for
the proposed collections, please visit https://www.reginfo.gov.
1. Wage Estimates
The Departments generally used data from the Contract Awarded Labor
Category (CALC) database tool \216\ to derive average labor costs for
estimating the burden and equivalent costs associated with the
information collection requirements (ICRs). Table 3 presents the
estimated mean hourly wages, which include both base pay and benefits,
used in the burden and equivalent cost estimates.
---------------------------------------------------------------------------
\216\ The CALC tool was built to assist acquisition
professionals with market research and price analysis for labor
categories on multiple U.S. General Services Administration (GSA) &
Veterans Administration (VA) contracts. The Departments chose to use
wages derived from the CALC database because, even though the Bureau
of Labor Statistics (BLS) data set is valuable to economists,
researchers, and others that would be interested in larger, more
macro-trends in parts of the economy, the CALC data set is meant to
help market research based on existing government contracts in
determining how much a project/product will cost based on the
required skill sets needed. The CALC data set factors the fully
burdened hourly rates (base pay + benefits) into the wages whereas
BLS does not. CALC occupations and wages provide the Departments
with data that aligns more with, and provides more detail related
to, the occupations required for the implementation of the
requirements in these proposed rules. CALC information and wage
rates are available at https://buy.gsa.gov/pricing/.
Table 3--Hourly Wages Used in Burden and Equivalent Cost Estimates
------------------------------------------------------------------------
Mean hourly wage
CALC occupation title ($/hour)
------------------------------------------------------------------------
Project Manager/Team Lead........................... $146.15
Sr. Developer/Lead.................................. 197.27
Designer............................................ 107.10
Training Specialist................................. 99.95
Customer Service Representative..................... 45.83
Web Database/Application Developer IV............... 170.35
------------------------------------------------------------------------
2. ICR Regarding Requirements for Contraceptive Disclosure to
Participants, Beneficiaries, or Enrollees on the Internet-Based Self-
Service Tool (26 CFR 54.9815-2715A2, 29 CFR 2590.715-2715A2, and 45 CFR
147.211)
The Departments propose in new 26 CFR 54.9815-2715A2(b)(1)(vi), 29
CFR 2590.715-2715A2(b)(1)(vi), and 45 CFR 147.211(b)(1)(vi) that if a
participant, beneficiary, or enrollee requests cost-sharing information
for any covered contraceptive item or service using a plan's or
issuer's internet-based self-service tool or requests such information
be provided on paper, a plan or issuer would be required to provide a
statement explaining the availability of OTC contraceptive items
without a prescription and without cost sharing, along with a phone
number and internet link to where a participant, beneficiary, or
enrollee can learn more information about the plan's or policy's
contraception coverage. The Departments propose to require plans and
issuers to incorporate this disclosure into their existing self-service
tool for plan years (in the individual market, policy years) beginning
on or after January 1, 2026.
The Departments assume that fully-insured group health plans would
depend on health insurance issuers and self-insured group health plans
would rely on TPAs to implement the proposed requirements. Based on
recent data, the Departments estimate that approximately 1,467 issuers
\217\ and 205 TPAs \218\ would implement the proposed requirements on
behalf of plans and issuers.
---------------------------------------------------------------------------
\217\ The Departments' estimate of the number of health
insurance companies and the number of issuers (issuer/State
combinations) is based on medical loss ratio reports submitted by
issuers for the 2022 reporting year. See CMS (2022), ``Medical Loss
Ratio Data and System Resources,'' available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
\218\ Non-issuer TPAs estimate is based on data derived from the
2016 benefit year reinsurance program contributions.
---------------------------------------------------------------------------
The Departments assume that issuers and TPAs have already built
self-service tools (first applicable for plan years (or policy years)
beginning on or after January 1, 2023) and would only be required to
modify their existing tools to incorporate the proposed new
contraceptive statement. This statement would explain that OTC
contraceptive items are covered without a prescription and without cost
sharing and would provide a customer service phone number and internet
link for a participant, beneficiary, or enrollee that wishes to speak
with a customer service representative or gain additional information
about the plan's or policy's contraception coverage. The
[[Page 85788]]
introduction of the new contraception statement would impose the
following additional burden on issuers and TPAs: \219\ (1) first-year
one-time development costs needed to integrate the contraception
statement language into the existing self-service tool. This would
involve design changes to the existing web user interface to enable
identification of services that would trigger the static statement to
the consumer. Additionally, the statement would be required to include
a link to information about the participant's, beneficiary's, or
enrollee's contraception coverage benefits. Issuers and TPAs would
incur one-time costs to create or update a web page to provide this
information; (2) annual costs of programming updates, web page
maintenance, and maintaining the list of contraceptive items and
services required to be coded to trigger the statement; (3) annual
costs associated with training customer service representatives to
assist consumers with inquiries related to the new contraceptive
statement, and (4) annual costs for customer service representatives to
respond to calls.
---------------------------------------------------------------------------
\219\ Note that the Departments expect self-insured group health
plans would rely on TPAs to implement the proposed requirements and
compensate them accordingly and thereby bear any implementation
costs.
---------------------------------------------------------------------------
The Departments estimate that for each issuer or TPA, on average,
it would take a Project Manager/Team Lead 40 hours (at $146.15 per
hour), a Senior Developer/lead 20 hours (at $197.27 per hour), a
Designer 25 hours at ($107.10 per hour), and a Web Database/Application
Developer IV 50 hours (at $170.35 per hour) to integrate the
contraception statement language into the existing self-service tool,
make design changes, and create or update a web page to provide further
details regarding the plan's or policy's contraceptive coverage. The
Departments estimate the total hour burden per issuer or TPA would be
approximately 135 hours, with an equivalent cost of approximately
$20,986 per issuer or TPA. For all 1,672 issuers and TPAs, the total
first-year one-time total hour burden is estimated to be 225,720 hours,
with an equivalent total cost of approximately $35,089,261 as shown in
table 4.
Table 4--Total First Year Estimated One-Time Cost and Hour Burden To Incorporate the New Contraceptive Statement
in the Internet-Based Self-Service Tool, Make Design Changes, and Develop or Update a Web Page To Provide
Further Details Regarding the Plan's or Policy's Contraception Coverage for All Health Insurance Issuers and
TPAs
----------------------------------------------------------------------------------------------------------------
Burden hours per
Number of respondents Number of responses respondent Total burden hours Total cost
----------------------------------------------------------------------------------------------------------------
1,672 1,672 135 225,720 $35,089,261
----------------------------------------------------------------------------------------------------------------
In addition to the one-time cost and hour burden estimated above,
issuers and TPAs would incur ongoing annual costs for website
maintenance, programming updates, and updates to the list of
contraceptive items and services required to be coded to trigger the
statement. The Departments estimate that for each issuer and TPA, it
would take a Web Database/Application Developer IV 5 hours (at $170.35
per hour) to complete this task. For all 1,672 issuers and TPAs, the
total annual maintenance burden related to the new contraceptive
statement would be 8,360 hours with an equivalent total cost of
approximately $1,424,126 as shown in table 5.
Table 5--Estimated Annual Cost and Hour Burden for Maintenance of Internet-Based Self-Service Tool Related to
the New Contraceptive Statement for All Issuers and TPAs
----------------------------------------------------------------------------------------------------------------
Burden hours per
Number of respondents Number of responses respondent Total burden hours Total cost
----------------------------------------------------------------------------------------------------------------
1,672 1,672 5 8,360 $1,424,126
----------------------------------------------------------------------------------------------------------------
Issuers and TPAs would also incur an ongoing annual burden and cost
associated with customer service representative training related to the
new contraceptive statement. The Departments assume that the
introduction of the new contraception statement would not necessitate
hiring additional full-time customer service representatives. Instead,
the Departments expect issuers and TPAs would utilize their existing
customer service representatives for this task. Therefore, the
Departments estimate that for each issuer and TPA, one Training
Specialist would spend 5 hours at a cost of $99.95 per hour to train 5
customer service representatives on how to respond to participants,
beneficiaries, and enrollees if they call in because of the new
contraception statement, who would also require 5 hours to complete the
training at a cost of $45.83 per hour. For all 1,672 issuers and TPAs,
the total annual training hour burden would be 50,160 hours, with an
equivalent total annual cost of approximately $2,751,276 as shown in
table 6.
Table 6--Estimated Annual Cost and Hour Burden for All Issuers and TPAs To Train Customer Service
Representatives To Provide Assistance to Consumers Related to New Contraceptive Statement in the Internet-Based
Self-Service Tool
----------------------------------------------------------------------------------------------------------------
Burden hours per
Number of respondents Number of responses respondent Total burden hours Total cost
----------------------------------------------------------------------------------------------------------------
1,672 1,672 30 50,160 $2,751,276
----------------------------------------------------------------------------------------------------------------
[[Page 85789]]
After the training, customer service representatives would be
expected to respond to the potential increase in calls resulting from
the new contraception statement. The Departments estimate that for each
issuer and TPA, it would take 5 customer service representatives 5
hours (at $45.83 per hour) to complete this task. For all 1,672 issuers
and TPAs, the total annual cost of responding to these calls would be
41,800 hours, with an equivalent total cost of approximately $1,915,694
as shown in table 7.
Table 7--Estimated Annual Cost and Hour Burden for All Issuers and TPAs To Respond to Calls Regarding the New
Contraceptive Statement on the Internet-Based Self-Service Tool
----------------------------------------------------------------------------------------------------------------
Burden hours per
Number of respondents Number of responses respondent Total burden hours Total cost
----------------------------------------------------------------------------------------------------------------
1,672 1,672 25 41,800 $1,915,694
----------------------------------------------------------------------------------------------------------------
Taking into account their segment of jurisdiction over issuers and
TPAs, HHS would assume 50 percent of the total burden, while the
Departments of Labor and the Treasury would each assume 25 percent.
Tables 8 to 10 display the share of each Department's total burden
hours to implement the new contraceptive statement.
Table 8--Estimated HHS Share of Total Burden Hours for Implementing the New Contraceptive Statement
----------------------------------------------------------------------------------------------------------------
Number of Number of Burden hours per Total burden
Year respondents responses respondent hours
----------------------------------------------------------------------------------------------------------------
Year 1........................................ 836 836 135 112,860
Year 2........................................ 836 836 60 50,160
Year 3........................................ 836 836 60 50,160
3-Year Average................................ 836 836 85 71,060
----------------------------------------------------------------------------------------------------------------
Table 9--Estimated Department of Labor's Share of Total Burden Hours for Implementing the New Contraceptive
Statement
----------------------------------------------------------------------------------------------------------------
Number of Number of Burden hours per Total burden
Year respondents responses respondent hours
----------------------------------------------------------------------------------------------------------------
Year 1........................................ 418 418 135 56,430
Year 2........................................ 418 418 60 25,080
Year 3........................................ 418 418 60 25,080
3-Year Average................................ 418 418 85 35,530
----------------------------------------------------------------------------------------------------------------
Table 10--Estimated Department of the Treasury's Share of Total Burden Hours for Implementing the New
Contraceptive Statement
----------------------------------------------------------------------------------------------------------------
Number of Number of Burden hours per Total burden
Year respondents responses respondent hours
----------------------------------------------------------------------------------------------------------------
Year 1........................................ 418 418 135 56,430
Year 2........................................ 418 418 60 25,080
Year 3........................................ 418 418 60 25,080
3-Year Average................................ 418 418 85 35,530
----------------------------------------------------------------------------------------------------------------
The burden related to the Transparency in Coverage disclosure of
certain cost-sharing information for HHS is currently approved under
OMB control number 0938-1429 (CMS-10715, Transparency in
Coverage).\220\ HHS will revise this information collection request to
account for the additional burden associated with the contraceptive
disclosure. This information collection request was approved as a host
for common forms. The burden related to the Transparency in Coverage
disclosure of certain cost-sharing information for DOL and Treasury was
submitted to OMB for each respective Department under 0938-1429 as
Request for Common Form (RCF) submissions. Upon OMB approval of the RCF
submissions, DOL and Treasury will update and submit their information
collection requests.
---------------------------------------------------------------------------
\220\ Available at https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202410-0938-006.
Table 11--Summary of Proposed Annual Recordkeeping and Reporting Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
Burden per Hourly labor
Regulation section OMB control No. Respondents Responses response Total annual cost of Total cost
(hours) burden (hours) reporting
--------------------------------------------------------------------------------------------------------------------------------------------------------
45 CFR 47.211..................... 0938-1429 836 836 85 71,060 $119 $8,721,124
26 CFR 54.9815-2715A2............. 0938-1429 418 418 85 35,530 119 4,360,562
[[Page 85790]]
29 CFR 2590.715-2715A2............ 0938-1429 418 418 85 35,530 119 4,360,562
---------------------------------------------------------------------------------------------------------------------
Total......................... ................. 1,672 1,672 .............. 142,120 .............. 17,442,248
--------------------------------------------------------------------------------------------------------------------------------------------------------
The Departments seek comment on the assumptions made and the burden
estimates discussed in this section.
E. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) \221\ requires agencies to
analyze options for regulatory relief of small entities and to prepare
an initial regulatory flexibility analysis to describe the impact of a
proposed rule on small entities, unless the head of the agency can
certify that the rule will not have a significant economic impact on a
substantial number of small entities. The RFA generally defines a
``small entity'' as (1) a proprietary firm meeting the size standards
of the Small Business Administration (SBA), (2) a not-for-profit
organization that is not dominant in its field, or (3) a small
government jurisdiction with a population of less than 50,000. States
and individuals are not included in the definition of ``small entity.''
The data and conclusions presented in this section amount to the
Departments' initial regulatory flexibility analysis under the RFA.
---------------------------------------------------------------------------
\221\ 5 U.S.C. 601, et seq.
---------------------------------------------------------------------------
1. Need for Regulatory Action, Objectives, and Legal Basis
As discussed in section II of this preamble, ongoing complaints and
reports of noncompliance with section 2713 of the PHS Act and its
implementing regulations indicate that consumers face barriers when
attempting to use their health plan or coverage to access recommended
preventive services without cost sharing. As a result of these concerns
and other significant activity related to preventive services, the
Departments are proposing to amend the regulations governing coverage
of recommended preventive services in order to ensure that
participants, beneficiaries, and enrollees can access the full range of
recommended preventive services to which they are entitled, with
particular focus on strengthening coverage requirements with respect to
recommended contraceptive items for women, as summarized in section
IV.A of this preamble. The Departments consider these provisions to be
timely and necessary given the documented challenges faced by consumers
in accessing recommended preventive services, as discussed in section
IV.B.2.a of this preamble.
2. Number of Affected Small Entities and Compliance Requirements and
Costs
The provisions in these proposed rules would affect small entities
including health insurance issuers, ERISA-covered non-grandfathered
group health plans, non-grandfathered non-Federal governmental plans,
and pharmacies.
The Departments anticipate that health insurance issuers, many of
which are part of larger health insurance companies or holding groups,
would incur costs associated with the provisions in these proposed
rules, as described in section IV.B.2.d of this preamble. Health
insurance companies are generally classified under the North American
Industry Classification System (NAICS) code 524114 (Direct Health and
Medical Insurance Carriers). According to SBA size standards,\222\
entities with average annual receipts of $47 million or less are
considered small entities for this NAICS code. The Departments expect
that few, if any, insurance companies underwriting health insurance
policies fall below these size thresholds. Based on data from medical
loss ratio annual report submissions for the 2022 reporting year,
approximately 87 out of 487 health insurance companies nationwide had
total premium revenue of $47 million or less.\223\ This estimate may
overstate the actual number of small health insurance companies that
may be affected, since over 76 percent of these small companies belong
to larger holding groups, and many, if not all, of these small
companies are likely to have non-health lines of business that will
result in their revenues exceeding $47 million.
---------------------------------------------------------------------------
\222\ Small Business Administration (2023). ``Table of Size
Standards (last updated March 2023),'' available at https://www.sba.gov/document/support--table-size-standards.
\223\ Based on internal calculations. See CMS, Medical Loss
Ratio Data and System Resources, available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html.
---------------------------------------------------------------------------
Plans and plan sponsors would incur some costs associated with
meeting the requirements of these proposed rules, whether directly or
indirectly through compensation paid to a TPA. However, the Departments
anticipate that most of these costs would ultimately be passed on to
plan participants, as discussed in section IV.B.2.e of this preamble.
As noted in section IV.B.2.b of this preamble, the Departments estimate
that there are 499,299 ERISA-covered self-insured, non-grandfathered
group health plans \224\ and 1,844,520 ERISA-covered fully-insured,
non-grandfathered group health plans.\225\ The Departments further
estimate that there are 76,345 non-grandfathered non-Federal
governmental plans sponsored by State and local governmental
entities.\226\
---------------------------------------------------------------------------
\224\ The Departments estimate that there are 594,404 ERISA-
covered self-insured group health plans based on data from the 2022
Medical Expenditure Panel Survey Insurance Component (MEPS-IC) and
the 2020 County Business Patterns from the Census Bureau. The 2020
KFF Employer Health Benefits Survey reported that in 2020, 16
percent of firms offering health benefits offered at least one
grandfathered health plan (see KFF, 2020 Kaiser Employer Health
Benefits Survey, available at https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf). Thus, the
Departments have calculated the number of self-insured, non-
grandfathered plans in the following manner: 594,404 ERISA-covered
self-insured group health plans x (100 percent minus 16 percent) =
499,299.
\225\ The Departments estimate that there are 2,195,857 ERISA-
covered fully-insured group health plans based on data from the 2022
Medical Expenditure Panel Survey Insurance Component (MEPS-IC) and
the 2020 County Business Patterns from the Census Bureau. The 2020
KFF Employer Health Benefits Survey reported that in 2020, 16
percent of firms offering health benefits offered at least one
grandfathered health plan (see KFF, 2020 Kaiser Employer Health
Benefits Survey, available at https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf). Thus, the
Departments have calculated the number of fully-insured, non-
grandfathered plans in the following manner: 2,195,857 ERISA-covered
fully-insured group health plans x (100 percent minus 16 percent)
=1,844,520.
\226\ According to data from the 2022 Census of Governments,
there are 90,887 State and local governmental entities (see U.S.
Census Bureau, 2022 Census of Governments, available at https://www.census.gov/data/tables/2022/econ/gus/2022-governments.html). The
Departments assume that each State and local governmental entity
sponsors one health plan on average. Therefore, the Departments
estimate that there are 90,887 non-Federal governmental health
plans. The 2020 KFF Employer Health Benefits Survey reported that 16
percent of employers offer at least one grandfathered plan (see KFF,
2020 Kaiser Employer Health Benefits Survey, available at https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf). The Departments therefore estimate there are
approximately 76,345 non-grandfathered non-Federal governmental
plans.
---------------------------------------------------------------------------
[[Page 85791]]
Due to limited data, the Departments are unable to quantify the
percentages of these plans whose sponsors might be considered small
entities under the RFA but anticipate that most could be.\227\ The
Departments request comment and data on the number of plan sponsors
that might be small entities, as well as the potential economic impacts
of these proposed rules on plan sponsors.
---------------------------------------------------------------------------
\227\ Based on data from the 2022 MEPS-IC, the 2020 County
Business Patterns from the Census Bureau, and the 2020 Kaiser
Employer Health Benefits Survey, the Departments estimate that
approximately 2,189,444 ERISA-covered non-grandfathered group health
plans have less than 100 participants, or approximately 93 percent
of the total number of ERISA-covered non-grandfathered group health
plans.
---------------------------------------------------------------------------
The Departments anticipate that pharmacies would incur costs to
update billing processes and systems for covered OTC contraceptive
items, as discussed in section IV.B.2.d of this preamble. Pharmacies
are classified under NAICS code 456110 (Pharmacies and Drug Retailers)
with a size standard of $37.5 million or less. According to the Census
Bureau's Statistics of U.S. Businesses, there are 19,234 firms in the
pharmacies and drug stores sector in the U.S. as of 2017.\228\ Based on
these firms' receipts in 2017 (adjusted for inflation between 2017 and
2023), 18,879, or 98.2 percent, of these firms, accounting for 22.0
percent of receipts in the sector, operate below the SBA size standard
and are therefore considered small entities.\229\ The Departments
request comment on this analysis.
---------------------------------------------------------------------------
\228\ U.S. Census Bureau (2017). 2017 SUSB Annual Data Tables by
Establishment Industry (Data by Enterprise Receipts Size), available
at https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.
\229\ Adjusted for inflation between 2017 and 2023 using the
consumer price index for all urban consumers (CPI-U). See U.S.
Bureau of Labor Statistics (2024), Consumer Price Index, available
at https://www.bls.gov/cpi/tables/supplemental-files/ (Historical
CPI-U, August 2024).
---------------------------------------------------------------------------
3. Duplication, Overlap, and Conflict With Other Rules and Regulations
The Departments do not anticipate that these proposed rules would
cause any duplication, overlap, or conflict with other rules and
regulations.
4. Significant Alternatives
The Departments considered various alternatives to the provisions
proposed in these proposed rules in section IV.C. In light of this
discussion of regulatory alternatives, the Departments are of the view
that there are no significant alternatives that would both achieve the
policy objectives and goals of these proposed rules and be less
burdensome to small entities.
F. Special Analyses--Department of the Treasury
Pursuant to the Memorandum of Agreement, Review of Treasury
Regulations under Executive Order 12866 (June 9, 2023), tax regulatory
actions issued by the IRS are not subject to the requirements of
section 6 of Executive Order 12866, as amended. Therefore, a regulatory
impact assessment is not required. Pursuant to section 7805(f) of the
Code, these regulations have been submitted to the Chief Counsel for
Advocacy of the Small Business Administration for comment on their
impact on small business.
G. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires that agencies assess anticipated costs and benefits before
issuing a proposed rule that includes any Federal mandate that may
result in expenditures in any one year by State, local, or Tribal
governments, in the aggregate, or by the private sector, of $100
million in 1995 dollars, updated annually for inflation. That threshold
is approximately $183 million in 2024. These proposed rules would not
impose a mandate that will result in the expenditure by State, local,
and Tribal governments, in the aggregate, or by the private sector, of
more than $183 million in any one year. As discussed in section
IV.B.2.e of this preamble, the Departments expect that most, if not
all, of the transfer effects would be incurred by covered individuals
(directly or indirectly) and the Federal government. The Departments
also anticipate that the total costs to plans, issuers, and pharmacies
identified in section IV.B.2.d of this preamble would be below the
threshold. The Departments therefore anticipate that State, local, and
Tribal governments, in the aggregate, or the private sector would not
experience an increase in expenditure that meets this threshold.
H. Federalism
Executive Order 13132 outlines fundamental principles of
federalism. It requires adherence to specific criteria by Federal
agencies in formulating and implementing policies that have
``substantial direct effects'' on the States, the relationship between
the National Government and States, or on the distribution of power and
responsibilities among the various levels of government. Federal
agencies promulgating regulations that have these federalism
implications must consult with State and local officials and describe
the extent of their consultation and the nature of the concerns of
State and local officials in the preamble to the proposed rules.
In the Departments' view, these proposed rules have federalism
implications because they may have direct effects on the States, the
relationship between the Federal government and the States, or on the
distribution of power and responsibilities among various levels of
government. However, the federalism implications are substantially
mitigated because, with respect to health insurance issuers, 45 States
are either enforcing the requirements related to coverage of specified
preventive services (including contraception) without cost sharing
pursuant to State law or otherwise are working collaboratively with HHS
to ensure that issuers meet these standards. In five States, HHS
ensures that issuers comply with these requirements. In addition, seven
States have passed laws requiring State-regulated health plans to
cover, without cost sharing, certain OTC contraceptive items without a
prescription.\230\ Therefore, these proposed rules would not be likely
to require substantial additional oversight of States by HHS.
---------------------------------------------------------------------------
\230\ CA, CO, MD, NJ, NM, NY, WA. KFF, (March 2024). ``State
Private Insurance Coverage Requirements for OTC Contraception
Without a Prescription,'' available at https://www.kff.org/other/state-indicator/state-private-insurance-coverage-requirements-for-otc-contraception-without-a-prescription.
---------------------------------------------------------------------------
In general, through section 514, ERISA supersedes State laws to the
extent that they relate to any covered employee benefit plan, and
preserves State laws that regulate insurance, banking, or securities.
While ERISA prohibits States from regulating a plan as an insurance or
investment company or bank, the preemption provisions of section 731 of
ERISA and section 2724 of the PHS Act (implemented in 29 CFR
2590.731(a) and 45 CFR 146.143(a)) apply so that the ACA's preventive
service requirements are not to be ``construed to supersede any
provision of State law which establishes, implements, or continues in
effect any standard or requirement solely relating to health insurance
issuers in connection with'' group or individual health insurance
coverage ``except to the extent that such standard or requirement
prevents the application of'' a Federal requirement. The conference
report accompanying the Health Insurance Portability and Accountability
Act of 1996 (HIPAA)
[[Page 85792]]
indicates that this is intended to be the ``narrowest'' preemption of
State laws.\231\
---------------------------------------------------------------------------
\231\ See Conf. Rep. No. 104-736, pg. 205, reprinted in 1996
U.S. Code Cong. & Admin. News 2018, available at https://www.congress.gov/congressional-report/104th-congress/house-report/736/1.
---------------------------------------------------------------------------
States may continue to apply State law requirements except to the
extent that such requirements prevent the application of the preventive
services requirements in section 2713 of the PHS Act.\232\ State
insurance laws that are more stringent than the Federal requirements
are unlikely to prevent the application of the preventive services
requirements and be preempted. Accordingly, States have significant
latitude to impose requirements on health insurance issuers that are
more restrictive than the Federal law.
---------------------------------------------------------------------------
\232\ See ERISA section 731 and PHS Act section 2724(a); 29 CFR
2590.731(a) and 45 CFR 146.143(a) and 148.210. See also FAQs Part
54, Q11 and Q12 (July 28, 2022), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-54.pdf and https://www.cms.gov/files/document/faqs-part-54.pdf.
---------------------------------------------------------------------------
The Departments request comment on the potential impacts on States
(if any) associated with these proposed rules.
Throughout the process of developing these proposed rules, to the
extent feasible within the specific preemption provisions of HIPAA as
it applies to the preventive services requirements, the Departments
have attempted to balance the States' interests in regulating health
insurance issuers, and Congress' intent to provide uniform minimum
protections to consumers in every State. By doing so, it is the
Departments' view that they have complied with the requirements of
Executive Order 13132.
Statutory Authority
The Department of the Treasury regulations are proposed to be
adopted pursuant to the authority contained in sections 7805 and 9833
of the Code.
The Department of Labor regulations are proposed to be adopted
pursuant to the authority contained in 29 U.S.C. 1002, 1135, 1182,
1185d, 1191a, 1191b, and 1191c; Secretary of Labor's Order 1-2011, 77
FR 1088 (Jan. 9, 2012).
The Department of Health and Human Services regulations are
proposed to be adopted pursuant to the authority contained in sections
2701 through 2763, 2791, 2792, and 2794 of the PHS Act (42 U.S.C.
300gg-63, 300gg-91, 300gg-92 and 300gg-94), as amended; sections 1311
and 1321 of PPACA (42 U.S.C. 13031 and 18041).
List of Subjects
26 CFR Part 54
Excise taxes, Health care, Health insurance, Pensions, Reporting
and recordkeeping requirements.
29 CFR Part 2590
Continuation coverage, Disclosure, Employee benefit plans, Group
health plans, Health care, Health insurance, Medical child support,
Reporting and recordkeeping requirements.
45 CFR Part 147
Health care, Health insurance, Reporting and recordkeeping
requirements, and State regulation of health insurance.
Douglas W. O'Donnell,
Deputy Commissioner, Internal Revenue Service.
Lisa M. Gomez,
Assistant Secretary, Employee Benefits Security Administration,
Department of Labor.
Xavier Becerra,
Secretary, Department of Health and Human Services.
DEPARTMENT OF THE TREASURY
Internal Revenue Service
Proposed Amendments to the Regulations
Accordingly, the Treasury Department and IRS propose to amend 26
CFR part 54 as follows:
PART 54--PENSION EXCISE TAXES
0
Paragraph 1.The authority citation for part 54 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
* * * * *
0
Par. 2. Section 54.9815-2713 is amended by revising paragraph (a)(4),
adding paragraph (a)(6), and revising paragraph (d) to read as follows:
Sec. 54.9815-2713 Coverage of preventive health services.
(a) * * *
(4) Reasonable medical management. (i) Nothing prevents a plan or
issuer from using reasonable medical management techniques to determine
the frequency, method, treatment, or setting for an item or service
described in paragraph (a)(1) of this section to the extent not
specified in the relevant recommendation or guideline. To the extent
not specified in a recommendation or guideline described in paragraph
(a)(1) of this section, a plan or issuer may rely on the relevant
clinical evidence base and established reasonable medical management
techniques to determine the frequency, method, treatment, or setting
for coverage of a recommended preventive health service.
(ii) For a medical management technique to be considered reasonable
under paragraph (a)(4)(i) of this section, a plan or issuer must have
an easily accessible, transparent, and sufficiently expedient
exceptions process that is not unduly burdensome on a participant,
beneficiary, or attending provider (or other person acting as the
individual's authorized representative) that ensures the individual can
receive coverage, without cost-sharing requirements, for the item or
service specified in a recommendation or guideline described in
paragraph (a)(1) of this section, according to the frequency, method,
treatment, or setting, that is medically necessary with respect to the
individual, as determined by the individual's attending provider.
* * * * *
(6) Contraceptive items--(i) Definitions. For purposes of this
paragraph (a)(6)--
(A) Drug-led combination product means a combination product, as
defined under 21 CFR 3.2(e), that comprises a drug and a device, and
for which the drug component provides the primary mode of action.
(B) Therapeutic equivalent has the meaning given the term
therapeutic equivalents in 21 CFR 314.3(b).
(ii) Over-the-counter contraception. Subject to Sec. 54.9815-2713A
and 45 CFR 147.132 and 147.133, a plan or issuer is not considered to
comply with paragraph (a)(1) of this section with respect to a
contraceptive item that can be lawfully obtained by a participant or
beneficiary without a prescription and for which the applicable
recommendation or guideline does not require a prescription, unless the
plan or issuer provides coverage for the contraceptive item without
requiring a prescription and without imposing any cost-sharing
requirements in accordance with paragraph (a)(1) of this section.
(iii) Therapeutic equivalents. For purposes of paragraph (a)(4) of
this section, a plan's or issuer's medical management techniques are
not considered to be reasonable unless the plan or issuer provides
coverage, without imposing any cost-sharing requirements, for all
contraceptive items recommended under paragraph (a)(1) of this section
that are drugs or drug-led combination products, other than those items
for which there is at least one therapeutic equivalent drug or drug-led
combination product, as applicable, for which the plan or issuer
provides
[[Page 85793]]
coverage without imposing any cost-sharing requirements.
* * * * *
(d) Applicability date. The provisions of this section apply for
plan years beginning on or after September 23, 2010. Notwithstanding
the previous sentence, the provisions of paragraph (a)(4)(ii) of this
section apply beginning on [EFFECTIVE DATE OF FINAL RULE] and the
provisions of paragraph (a)(6) of this section apply for plan years
beginning on or after January 1, 2026. See Sec. 54.9815-1251 for
determining the application of this section to grandfathered health
plans (providing that these rules regarding coverage of preventive
health services do not apply to grandfathered health plans).
0
Par. 3. Section 54.9815-2715A2 is amended by:
0
a. Redesignating paragraphs (b)(1)(vi) and (vii) as paragraphs
(b)(1)(vii) and (viii);
0
b. Adding new paragraph (b)(1)(vi); and
0
c. Revising paragraph (c)(1).
The addition and revision read as follows:
Sec. 54.9815-2715A2 Transparency in coverage--required disclosures to
participants and beneficiaries.
* * * * *
(b) * * *
(1) * * *
(vi) If a participant or beneficiary requests cost-sharing
information for any covered contraceptive item or service, a statement
explaining that over-the-counter contraceptive items are covered
without a prescription and without cost sharing in accordance with
Sec. 54.9815-2713(a)(6), along with a phone number and internet link
to where a participant or beneficiary can learn more information about
the plan or policy's contraception coverage.
* * * * *
(c) * * *
(1) The provisions of this section apply for plan years beginning
on or after January 1, 2023, with respect to the 500 items and services
to be posted on a publicly available website, and with respect to all
covered items and services, for plan years beginning on or after
January 1, 2024. Notwithstanding the previous sentence, the provisions
of paragraph (b)(1)(vi) of this section apply for plan years beginning
on or after January 1, 2026.
* * * * *
DEPARTMENT OF LABOR
Employee Benefits Security Administration
For the reasons stated in the preamble, the Department of Labor
proposes to amend 29 CFR part 2590 as set forth below:
PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS
0
1. The authority citation for part 2590 continues to read as follows:
Authority: 29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-
1183, 1181 note, 1185, 1185a-n, 1191, 1191a, 1191b, and 1191c; sec.
101(g), Pub. L.104-191, 110 Stat. 1936; sec. 401(b), Pub. L. 105-
200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), Pub. L. 110-
343, 122 Stat. 3881; sec. 1001, 1201, and 1562(e), Pub. L. 111-148,
124 Stat. 119, as amended by Pub. L. 111-152, 124 Stat. 1029;
Division M, Pub. L. 113-235, 128 Stat. 2130; Pub. L. 116-260 134
Stat. 1182; Secretary of Labor's Order 1-2011, 77 FR 1088 (Jan. 9,
2012).
0
2. Section 2590.715-2713 is amended by revising paragraph (a)(4),
adding paragraph (a)(6), and revising paragraph (d) to read as follows:
Sec. 2590.715-2713 Coverage of preventive health services.
(a) * * *
(4) Reasonable medical management. (i) Nothing prevents a plan or
issuer from using reasonable medical management techniques to determine
the frequency, method, treatment, or setting for an item or service
described in paragraph (a)(1) of this section to the extent not
specified in the relevant recommendation or guideline. To the extent
not specified in a recommendation or guideline described in paragraph
(a)(1) of this section, a plan or issuer may rely on the relevant
clinical evidence base and established reasonable medical management
techniques to determine the frequency, method, treatment, or setting
for coverage of a recommended preventive health service.
(ii) For a medical management technique to be considered reasonable
under paragraph (a)(4)(i) of this section, a plan or issuer must have
an easily accessible, transparent, and sufficiently expedient
exceptions process that is not unduly burdensome on a participant,
beneficiary, or attending provider (or other person acting as the
individual's authorized representative) that ensures the individual can
receive coverage, without cost-sharing requirements, for the item or
service specified in a recommendation or guideline described in
paragraph (a)(1) of this section, according to the frequency, method,
treatment, or setting, that is medically necessary with respect to the
individual, as determined by the individual's attending provider.
* * * * *
(6) Contraceptive items--(i) Definitions. For purposes of this
paragraph (a)(6)--
(A) Drug-led combination product means a combination product, as
defined under 21 CFR 3.2(e), that comprises a drug and a device, and
for which the drug component provides the primary mode of action.
(B) Therapeutic equivalent has the meaning given the term
therapeutic equivalents in 21 CFR 314.3(b).
(ii) Over-the-counter contraception. Subject to Sec. 2590.715-
2713A and 45 CFR 147.132 and 147.133, a plan or issuer is not
considered to comply with paragraph (a)(1) of this section with respect
to a contraceptive item that can be lawfully obtained by a participant
or beneficiary without a prescription and for which the applicable
recommendation or guideline does not require a prescription, unless the
plan or issuer provides coverage for the contraceptive item without
requiring a prescription and without imposing any cost-sharing
requirements in accordance with paragraph (a)(1) of this section.
(iii) Therapeutic equivalents. For purposes of paragraph (a)(4) of
this section, a plan's or issuer's medical management techniques are
not considered to be reasonable unless the plan or issuer provides
coverage, without imposing any cost-sharing requirements, for all
contraceptive items recommended under paragraph (a)(1) of this section
that are drugs or drug-led combination products, other than those items
for which there is at least one therapeutic equivalent drug or drug-led
combination product, as applicable, for which the plan or issuer
provides coverage without imposing any cost-sharing requirements.
* * * * *
(d) Applicability date. The provisions of this section apply for
plan years beginning on or after September 23, 2010. Notwithstanding
the previous sentence, the provisions of paragraph (a)(4)(ii) of this
section apply beginning on [EFFECTIVE DATE OF FINAL RULE] and the
provisions of paragraph (a)(6) of this section apply for plan years
beginning on or after January 1, 2026. See Sec. 2590.715-1251 for
determining the application of this section to grandfathered health
plans (providing that these rules regarding coverage of preventive
health services do not apply to grandfathered health plans).
* * * * *
0
3. Section 2590.715-2715A2 is amended by--
0
a. Redesignating paragraphs (b)(1)(vi) and (vii) as paragraphs
(b)(1)(vii) and (viii);
[[Page 85794]]
0
b. Adding new paragraph (b)(1)(vi); and
0
c. Revising paragraph (c)(1).
The addition and revision read as follows:
Sec. 2590.715-2715A2 Transparency in coverage--required disclosures
to participants and beneficiaries.
* * * * *
(b) * * *
(1) * * *
(vi) If a participant or beneficiary requests cost-sharing
information for any covered contraceptive item or service, a statement
explaining that over-the-counter contraceptive items are covered
without a prescription and without cost sharing in accordance with
Sec. 2590.715-2713(a)(6), along with a phone number and internet link
to where a participant or beneficiary can learn more information about
the plan or policy's contraception coverage.
* * * * *
(c) * * *
(1) The provisions of this section apply for plan years beginning
on or after January 1, 2023, with respect to the 500 items and services
to be posted on a publicly available website, and with respect to all
covered items and services, for plan years beginning on or after
January 1, 2024. Notwithstanding the previous sentence, the provisions
of paragraph (b)(1)(vi) of this section apply for plan years beginning
on or after January 1, 2026.
* * * * *
DEPARTMENT OF HEALTH AND HUMAN SERVICES
For the reasons stated in the preamble, the Department of Health
and Human Services proposes to amend 45 CFR part 147 as set forth
below:
PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND
INDIVIDUAL HEALTH INSURANCE MARKETS
0
1. The authority citation for part 147 continues to read as follows:
Authority: 42 U.S.C. 300gg through 300gg-63, 300gg-91, 300gg-92,
and 300gg-111 through 300gg-139, as amended, and section 3203, Pub.
L. 116-136, 134 Stat. 281.
0
2. Section 147.130 is amended by revising paragraph (a)(4), adding
paragraph (a)(6), and revising paragraph (d) to read as follows:
Sec. 147.130 Coverage of preventive health services.
(a) * * *
(4) Reasonable medical management. (i) Nothing prevents a plan or
issuer from using reasonable medical management techniques to determine
the frequency, method, treatment, or setting for an item or service
described in paragraph (a)(1) of this section to the extent not
specified in the relevant recommendation or guideline. To the extent
not specified in a recommendation or guideline described in paragraph
(a)(1) of this section, a plan or issuer may rely on the relevant
clinical evidence base and established reasonable medical management
techniques to determine the frequency, method, treatment, or setting
for coverage of a recommended preventive health service.
(ii) For a medical management technique to be considered reasonable
under paragraph (a)(4)(i) of this section, a plan or issuer must have
an easily accessible, transparent, and sufficiently expedient
exceptions process that is not unduly burdensome on a participant,
beneficiary, enrollee, or attending provider (or other person acting as
the individual's authorized representative) that ensures the individual
can receive coverage, without cost-sharing requirements, for the item
or service specified in a recommendation or guideline described in
paragraph (a)(1) of this section, according to the frequency, method,
treatment, or setting, that is medically necessary with respect to the
individual, as determined by the individual's attending provider.
* * * * *
(6) Contraceptive items--(i) Definitions. For purposes of this
paragraph (a)(6)--
(A) Drug-led combination product means a combination product, as
defined under 21 CFR 3.2(e), that comprises a drug and a device, and
for which the drug component provides the primary mode of action.
(B) Therapeutic equivalent has the meaning given the term
therapeutic equivalents in 21 CFR 314.3(b).
(ii) Over-the-counter contraception. Subject to Sec. Sec. 147.131,
147.132, and 147.133, a plan or issuer is not considered to comply with
paragraph (a)(1) of this section with respect to a contraceptive item
that can be lawfully obtained by a participant, beneficiary, or
enrollee without a prescription and for which the applicable
recommendation or guideline does not require a prescription, unless the
plan or issuer provides coverage for the contraceptive item without
requiring a prescription and without imposing any cost-sharing
requirements in accordance with paragraph (a)(1) of this section.
(iii) Therapeutic equivalents. For purposes of paragraph (a)(4) of
this section, a plan's or issuer's medical management techniques are
not considered to be reasonable unless the plan or issuer provides
coverage, without imposing any cost-sharing requirements, for all
contraceptive items recommended under paragraph (a)(1) of this section
that are drugs or drug-led combination products, other than those items
for which there is at least one therapeutic equivalent drug or drug-led
combination product, as applicable, for which the plan or issuer
provides coverage without imposing any cost-sharing requirements.
* * * * *
(d) Applicability date. The provisions of this section apply for
plan years (in the individual market, for policy years) beginning on or
after September 23, 2010. Notwithstanding the previous sentence, the
provisions of paragraph (a)(4)(ii) of this section apply beginning on
[EFFECTIVE DATE OF FINAL RULE] and the provisions of paragraph (a)(6)
of this section apply for plan years (in the individual market, for
policy years), beginning on or after January 1, 2026. See Sec. 147.140
of this part for determining the application of this section to
grandfathered health plans (providing that these rules regarding
coverage of preventive health services do not apply to grandfathered
health plans).
* * * * *
0
3. Section 147.211 is amended by--
0
a. Redesignating paragraphs (b)(1)(vi) and (vii) as paragraphs
(b)(1)(vii) and (viii);
0
b. Adding new paragraph (b)(1)(vi); and
0
c. Revising paragraph (c)(1).
The addition and revision read as follows:
Sec. 147.211 Transparency in coverage--required disclosures to
participants, beneficiaries, or enrollees.
* * * * *
(b) * * *
(1) * * *
(vi) If a participant, beneficiary, or enrollee requests cost-
sharing information for any covered contraceptive item or service, a
statement explaining that over-the-counter contraceptive items are
covered without a prescription and without cost sharing in accordance
with Sec. 147.130(a)(6), along with a phone number and internet link
to where a participant, beneficiary, or enrollee can learn more
information about the plan or policy's contraception coverage.
* * * * *
(c) * * *
(1) The provisions of this section apply for plan years (in the
individual
[[Page 85795]]
market, for policy years) beginning on or after January 1, 2023, with
respect to the 500 items and services to be posted on a publicly
available website, and with respect to all covered items and services,
for plan years (in the individual market, for policy years) beginning
on or after January 1, 2024. Notwithstanding the previous sentence, the
provisions of paragraph (b)(1)(vi) of this section apply for plan years
(in the individual market, for policy years) beginning on or after
January 1, 2026.
* * * * *
[FR Doc. 2024-24675 Filed 10-23-24; 4:15 pm]
BILLING CODE 4150-29-P; 4830-01-P; 4120-01-P