Healthcare providers will be paid less for their for services under the federal Pre-Existing Condition Insurance Plan (PCIP) starting next month to stretch its funding because it is fast running out of money. Many of the patients enrolled in the transitional program need expensive and ongoing treatment for cancer and other critical conditions.
Effective June 15, hospitals and physicians will be paid less for their services – primarily at Medicare payment rates or a relative value pricing method where Medicare does not apply, according to an interim final rule that the Health and Human Services Department published on Wednesday in the Federal Register. The public may comment until July 22, after which HHS may fine tune the regulation in response.
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Providers also may not charge enrollees higher out-of-pocket costs than the plan already allows in order for facilities and physicians to recoup lost revenue from lower payments, the rule noted.
Established by the Affordable Care Act and funded by Congress at $5 billion, the temporary high-risk pool program offers access to affordable health insurance to those who are uninsured with pre-existing conditions and locked out of the insurance market because of their health status. A number of states contracted with HHS to administer it.
The program will expire in 2014, when most health insurance issuers will be required to offer coverage to all individuals regardless of pre-existing conditions.
Substantially fewer individuals signed up for the program, only about 135,000 when HHS estimated enrollment would be 400,000 at its inception in 2010. But even that smaller number has resulted in claims paid by the PCIP that are, on average, 2.5 times higher than claims paid by state high-risk pools that predate the federal pre-existing conditions plan, the rule said. However, those enrolled in the federal program do not have any waiting period or pre-existing exclusions that they experience in some state plans.
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In 2012, the average annual claims cost paid per enrollee was $32,108. HHS has taken measures to rein in costs, including stopping referral fees to brokers and agents, switching provider networks to negotiate more discounts, and reducing plan options to just one.
"Based on enrollment and claims data, current HHS estimates indicate that the aggregate amount needed to pay for PCIP program expenses may be greater than the remaining funding…," the rule said. "HHS believes it is prudent and necessary to make additional adjustments … to payment rates or covered services to ensure that there is sufficient funding available to provide coverage to currently enrolled individuals until the program ends in 2014," the rule said.
However, HHS will not change payment rates for prescription drugs, organ transplants, dialysis, and durable medical equipment.
Because the PCIP serves such a small population and is temporary, HHS said it anticipated the new payment regulation will have a minimal affect to providers and hoped that they would continue to participate.
"While we understand that the decision to no longer treat PCIP enrollees is possible, we believe and are hopeful that most facilities and providers will accept the new payment rates …given the serious health conditions many federally-administered PCIP enrollees have and the prospect that such reduced payment is temporary until 2014 when no one can generally be denied health coverage because of a pre-existing condition," HHS said in the rule.
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