[Federal Register Volume 75, Number 137 (Monday, July 19, 2010)]
[Rules and Regulations]
[Pages 41726-41760]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-17242]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[TD 9493]
RIN 1545-BJ60

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

RIN 1210-AB44

DEPARTMENT OF HEALTH AND HUMAN SERVICES

[OCIIO-9992-IFC]

45 CFR Part 147

RIN 0938-AQ07


Interim Final Rules for Group Health Plans and Health Insurance 
Issuers Relating to Coverage of Preventive Services Under the Patient 
Protection and Affordable Care Act

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

ACTION: Interim final rules with request for comments.

-----------------------------------------------------------------------

SUMMARY: This document contains interim final regulations implementing 
the rules for group health plans and health insurance coverage in the 
group and individual markets under provisions of the Patient Protection 
and Affordable Care Act regarding preventive health services.

DATES: Effective date. These interim final regulations are effective on 
September 17, 2010.
    Comment date. Comments are due on or before September 17, 2010.
    Applicability dates. These interim final regulations generally 
apply to group health plans and group health insurance issuers for plan 
years beginning on or after September 23, 2010. These interim final 
regulations generally apply to individual health insurance issuers for 
policy years beginning on or after September 23, 2010.

ADDRESSES: Written comments may be submitted to any of the addresses 
specified below. Any comment that is submitted to any Department will 
be shared with the other Departments. Please do not submit duplicates.
    All comments will be made available to the public. WARNING: Do not 
include any personally identifiable information (such as name, address, 
or other contact information) or confidential business information that 
you do not want publicly disclosed. All comments 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.
    Department of Labor. Comments to the Department of Labor, 
identified by RIN 1210-AB44, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: E-OHPSCA2713.EBSA@dol.gov.
     Mail or Hand Delivery: Office of Health Plan Standards and 
Compliance Assistance, Employee Benefits Security Administration, Room 
N-5653, U.S. Department of Labor, 200 Constitution Avenue, NW., 
Washington, DC 20210, Attention: RIN 1210-AB44.
    Comments received by the Department of Labor will be posted without 
change to http://www.regulations.gov and http://www.dol.gov/ebsa, and 
available for public inspection at the Public Disclosure Room, N-1513, 
Employee Benefits Security Administration, 200 Constitution Avenue, 
NW., Washington, DC 20210.
    Department of Health and Human Services. In commenting, please 
refer to file code OCIIO-9992-IFC. Because of staff and resource 
limitations, we cannot accept comments by facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the instructions under 
the ``More Search Options'' tab.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Office of Consumer Information and Insurance Oversight, 
Department of Health and Human Services, Attention: OCIIO-9992-IFC, 
P.O. Box 8016, Baltimore, MD 21244-1850.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the

[[Page 41727]]

following address ONLY: Office of Consumer Information and Insurance 
Oversight, Department of Health and Human Services, Attention: OCIIO-
9992-IFC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 
21244-1850.
    4. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments before the close of the comment period 
to either of the following addresses:
    a. For delivery in Washington, DC--Office of Consumer Information 
and Insurance Oversight, Department of Health and Human Services, Room 
445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., 
Washington, DC 20201.

(Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the OCIIO drop slots located in the main lobby of the building. A 
stamp-in clock is available for persons wishing to retain a proof of 
filing by stamping in and retaining an extra copy of the comments 
being filed.)

    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
please call (410) 786-7195 in advance to schedule your arrival with one 
of our staff members.
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.
    Submission of comments on paperwork requirements. You may submit 
comments on this document's paperwork requirements by following the 
instructions at the end of the ``Collection of Information 
Requirements'' section in this document.
    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. We post all comments 
received before the close of the comment period on the following Web 
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to 
view public comments.
    Comments received timely will also be available for public 
inspection as they are received, generally beginning approximately 
three weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. EST. To schedule an appointment to view public comments, 
phone 1-800-743-3951.
    Internal Revenue Service. Comments to the IRS, identified by REG-
120391-10, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: CC:PA:LPD:PR (REG-120391-10), room 5205, Internal 
Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 
20044.
     Hand or courier delivery: Monday through Friday between 
the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-120391-10), 
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, 
NW., Washington DC 20224.
    All submissions to the IRS will be open to public inspection and 
copying in room 1621, 1111 Constitution Avenue, NW., Washington, DC 
from 9 a.m. to 4 p.m.

FOR FURTHER INFORMATION CONTACT: Amy Turner or Beth Baum, Employee 
Benefits Security Administration, Department of Labor, at (202) 693-
8335; Karen Levin, Internal Revenue Service, Department of the 
Treasury, at (202) 622-6080; Jim Mayhew, Office of Consumer Information 
and Insurance Oversight, Department of Health and Human Services, at 
(410) 786-1565.
    Customer Service Information: Individuals interested in obtaining 
information from the Department of Labor concerning employment-based 
health coverage laws may call the EBSA Toll-Free Hotline at 1-866-444-
EBSA (3272) or visit the Department of Labor's Web site (http://www.dol.gov/ebsa). In addition, information from HHS on private health 
insurance for consumers can be found on the Centers for Medicare & 
Medicaid Services (CMS) Web site (http://www.cms.hhs.gov/HealthInsReformforConsume/01_Overview.as) and information on health 
reform can be found at http://www.healthreform.gov.

SUPPLEMENTARY INFORMATION:

I. Background

    The Patient Protection and Affordable Care Act (the Affordable Care 
Act), Public Law 111-148, was enacted on March 23, 2010; the Health 
Care and Education Reconciliation Act (the Reconciliation Act), Public 
Law 111-152, was enacted on March 30, 2010. The Affordable Care Act and 
the Reconciliation Act reorganize, amend, and add 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 term ``group health plan'' includes 
both insured and self-insured group health plans.\1\ The Affordable 
Care Act adds section 715(a)(1) to the Employee Retirement Income 
Security Act (ERISA) and section 9815(a)(1) to the Internal Revenue 
Code (the Code) to incorporate the provisions of part A of title XXVII 
of the PHS Act into ERISA and the Code, and make them applicable to 
group health plans, and health insurance issuers providing health 
insurance coverage in connection with group health plans. The PHS Act 
sections incorporated by this reference are sections 2701 through 2728. 
PHS Act sections 2701 through 2719A are substantially new, though they 
incorporate some provisions of prior law. PHS Act sections 2722 through 
2728 are sections of prior law renumbered, with some, mostly minor, 
changes.
---------------------------------------------------------------------------

    \1\ The term ``group health plan'' is used in title XXVII of the 
PHS Act, part 7 of ERISA, and chapter 100 of the Code, and is 
distinct from the term ``health plan,'' as used in other provisions 
of title I of the Affordable Care Act. The term ``health plan'' does 
not include self-insured group health plans.
---------------------------------------------------------------------------

    Subtitles A and C of title I of the Affordable Care Act amend the 
requirements of title XXVII of the PHS Act (changes to which are 
incorporated into ERISA section 715). The preemption provisions of 
ERISA section 731 and PHS Act section 2724 \2\ (implemented in 29 CFR 
2590.731(a) and 45 CFR 146.143(a)) apply so that the requirements of 
part 7 of ERISA and title XXVII of the PHS Act, as amended by the 
Affordable Care Act, 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 requirement'' of the Affordable Care Act. 
Accordingly, State laws that impose on health insurance issuers 
requirements that are stricter than those imposed by the Affordable 
Care Act will not be superseded by the Affordable Care Act.
---------------------------------------------------------------------------

    \2\ Code section 9815 incorporates the preemption provisions of 
PHS Act section 2724. Prior to the Affordable Care Act, there were 
no express preemption provisions in chapter 100 of the Code.

---------------------------------------------------------------------------

[[Page 41728]]

    The Departments of Health and Human Services, Labor, and the 
Treasury (the Departments) are issuing regulations in several phases 
implementing the revised PHS Act sections 2701 through 2719A and 
related provisions of the Affordable Care Act. The first phase in this 
series was the publication of a Request for Information relating to the 
medical loss ratio provisions of PHS Act section 2718, published in the 
Federal Register on April 14, 2010 (75 FR 19297). The second phase was 
interim final regulations implementing PHS Act section 2714 (requiring 
dependent coverage of children to age 26), published in the Federal 
Register on May 13, 2010 (75 FR 27122). The third phase was interim 
final regulations implementing section 1251 of the Affordable Care Act 
(relating to status as a grandfathered health plan), published in the 
Federal Register on June 17, 2010 (75 FR 34538). The fourth phase was 
interim final regulations implementing PHS Act sections 2704 
(prohibiting preexisting condition exclusions), 2711 (regarding 
lifetime and annual dollar limits on benefits), 2712 (regarding 
restrictions on rescissions), and 2719A (regarding patient 
protections), published in the Federal Register on June 28, 2010 (75 FR 
37188). These interim final regulations are being published to 
implement PHS Act section 2713 (relating to coverage for preventive 
services). PHS Act section 2713 is generally effective for plan years 
(in the individual market, policy years) beginning on or after 
September 23, 2010, which is six months after the March 23, 2010 date 
of enactment of the Affordable Care Act. The implementation of other 
provisions of PHS Act sections 2701 through 2719A will be addressed in 
future regulations.

II. Overview of the Regulations: PHS Act Section 2713, Coverage of 
Preventive Health Services (26 CFR 54.9815-2713T, 29 CFR 2590.715-2713, 
45 CFR 147.130)

    Section 2713 of the PHS Act, as added by the Affordable Care Act, 
and these interim final regulations require that a group health plan 
and a health insurance issuer offering group or individual health 
insurance coverage provide benefits for and prohibit the imposition of 
cost-sharing requirements with respect to:
     Evidence-based items or services that have in effect a 
rating of A or B in the current recommendations of the United States 
Preventive Services Task Force (Task Force) with respect to the 
individual involved.\3\
---------------------------------------------------------------------------

    \3\ Under PHS Act section 2713(a)(5), the Task Force 
recommendations regarding breast cancer screening, mammography, and 
prevention issued in or around November of 2009 are not to be 
considered current recommendations on this subject for purposes of 
any law. Thus, the recommendations regarding breast cancer 
screening, mammography, and prevention issued by the Task Force 
prior to those issued in or around November of 2009 (i.e., those 
issued in 2002) will be considered current until new recommendations 
in this area are issued by the Task Force or appear in comprehensive 
guidelines supported by the Health Resources and Services 
Administration concerning preventive care and screenings for women.
---------------------------------------------------------------------------

     Immunizations for routine use in children, adolescents, 
and adults that have in effect a recommendation from the Advisory 
Committee on Immunization Practices of the Centers for Disease Control 
and Prevention (Advisory Committee) with respect to the individual 
involved. A recommendation of the Advisory Committee is considered to 
be ``in effect'' after it has been adopted by the Director of the 
Centers for Disease Control and Prevention. A recommendation is 
considered to be for routine use if it appears on the Immunization 
Schedules of the Centers for Disease Control and Prevention.
     With respect to infants, children, and adolescents, 
evidence-informed preventive care and screenings provided for in the 
comprehensive guidelines supported by the Health Resources and Services 
Administration (HRSA).
     With respect to women, evidence-informed preventive care 
and screening provided for in comprehensive guidelines supported by 
HRSA (not otherwise addressed by the recommendations of the Task 
Force). The Department of HHS is developing these guidelines and 
expects to issue them no later than August 1, 2011.
    The complete list of recommendations and guidelines that are 
required to be covered under these interim final regulations can be 
found at http://www.HealthCare.gov/center/regulations/prevention.html. 
Together, the items and services described in these recommendations and 
guidelines are referred to in this preamble as ``recommended preventive 
services.''
    These interim final regulations clarify the cost-sharing 
requirements when a recommended preventive service is provided during 
an office visit. First, if a recommended preventive service is billed 
separately (or is tracked as individual encounter data separately) from 
an office visit, then a plan or issuer may impose cost-sharing 
requirements with respect to the office visit. Second, if a recommended 
preventive service is not billed separately (or is not tracked as 
individual encounter data separately) from an office visit and the 
primary purpose of the office visit is the delivery of such an item or 
service, then a plan or issuer may not impose cost-sharing requirements 
with respect to the office visit. Finally, if a recommended preventive 
service is not billed separately (or is not tracked as individual 
encounter data separately) from an office visit and the primary purpose 
of the office visit is not the delivery of such an item or service, 
then a plan or issuer may impose cost-sharing requirements with respect 
to the office visit. The reference to tracking individual encounter 
data was included to provide guidance with respect to plans and issuers 
that use capitation or similar payment arrangements that do not bill 
individually for items and services.
    Examples in these interim final regulations illustrate these 
provisions. In one example, an individual receives a cholesterol 
screening test, a recommended preventive service, during a routine 
office visit. The plan or issuer may impose cost-sharing requirements 
for the office visit because the recommended preventive service is 
billed as a separate charge. A second example illustrates that 
treatment resulting from a preventive screening can be subject to cost-
sharing requirements if the treatment is not itself a recommended 
preventive service. In another example, an individual receives a 
recommended preventive service that is not billed as a separate charge. 
In this example, the primary purpose for the office visit is recurring 
abdominal pain and not the delivery of a recommended preventive 
service; therefore the plan or issuer may impose cost-sharing 
requirements for the office visit. In the final example, an individual 
receives a recommended preventive service that is not billed as a 
separate charge, and the delivery of that service is the primary 
purpose of the office visit. Therefore, the plan or issuer may not 
impose cost-sharing requirements for the office visit.
    With respect to a plan or health insurance coverage that has a 
network of providers, these interim final regulations make clear that a 
plan or issuer is not required to provide coverage for recommended 
preventive services delivered by an out-of-network provider. Such a 
plan or issuer may also impose cost-sharing requirements for 
recommended preventive services delivered by an out-of-network 
provider.
    These interim final regulations provide that if a recommendation or

[[Page 41729]]

guideline for a recommended preventive service does not specify the 
frequency, method, treatment, or setting for the provision of that 
service, the plan or issuer can use reasonable medical management 
techniques to determine any coverage limitations. The use of reasonable 
medical management techniques allows plans and issuers to adapt these 
recommendations and guidelines to coverage of specific items and 
services where cost sharing must be waived. Thus, under these interim 
final regulations, a plan or issuer may rely on established techniques 
and the relevant evidence base to determine the frequency, method, 
treatment, or setting for which a recommended preventive service will 
be available without cost-sharing requirements to the extent not 
specified in a recommendation or guideline.
    The statute and these interim final regulations clarify that a plan 
or issuer continues to have the option to cover preventive services in 
addition to those required to be covered by PHS Act section 2713. For 
such additional preventive services, a plan or issuer may impose cost-
sharing requirements at its discretion. Moreover, a plan or issuer may 
impose cost-sharing requirements for a treatment that is not a 
recommended preventive service, even if the treatment results from a 
recommended preventive service.
    The statute requires the Departments to establish an interval of 
not less than one year between when recommendations or guidelines under 
PHS Act section 2713(a) \4\ are issued, and the plan year (in the 
individual market, policy year) for which coverage of the services 
addressed in such recommendations or guidelines must be in effect. 
These interim final regulations provide that such coverage must be 
provided for plan years (in the individual market, policy years) 
beginning on or after the later of September 23, 2010, or one year 
after the date the recommendation or guideline is issued. Thus, 
recommendations and guidelines issued prior to September 23, 2009 must 
be provided for plan years (in the individual market, policy years) 
beginning on or after September 23, 2010. For the purpose of these 
interim final regulations, a recommendation or guideline of the Task 
Force is considered to be issued on the last day of the month on which 
the Task Force publishes or otherwise releases the recommendation; a 
recommendation or guideline of the Advisory Committee is considered to 
be issued on the date on which it is adopted by the Director of the 
Centers for Disease Control and Prevention; and a recommendation or 
guideline in the comprehensive guidelines supported by HRSA is 
considered to be issued on the date on which it is accepted by the 
Administrator of HRSA or, if applicable, adopted by the Secretary of 
HHS. For recommendations and guidelines adopted after September 23, 
2009, information at http://www.HealthCare.gov/center/regulations/prevention.html will be updated on an ongoing basis and will include 
the date on which the recommendation or guideline was accepted or 
adopted.
---------------------------------------------------------------------------

    \4\ Section 2713(b)(1) refers to an interval between ``the date 
on which a recommendation described in subsection (a)(1) or (a)(2) 
or a guideline under subsection (a)(3) is issued and the plan year 
with respect to which the requirement described in subsection (a) is 
effective with respect to the service described in such 
recommendation or guideline.'' While the first part of this 
statement does not mention guidelines under subsection (a)(4), it 
would make no sense to treat the services covered under (a)(4) any 
differently than those in (a)(1), (a)(2), and (a)(3). First, the 
same sentence refers to ``the requirement described in subsection 
(a),'' which would include a requirement under (a)(4). Secondly, the 
guidelines under (a)(4) are from the same source as those under 
(a)(3), except with respect to women rather than infants, children 
and adolescents; and other preventive services involving women are 
addressed in (a)(1), so there is no plausible policy rationale for 
treating them differently. Third, without this clarification, it 
would be unclear when such services would have to be covered. These 
interim final regulations accordingly apply the intervals 
established therein to services under section 2713(a)(4).
---------------------------------------------------------------------------

    Finally, these interim final regulations make clear that a plan or 
issuer is not required to provide coverage or waive cost-sharing 
requirements for any item or service that has ceased to be a 
recommended preventive service.\5\ Other requirements of Federal or 
State law may apply in connection with ceasing to provide coverage or 
changing cost-sharing requirements for any such item or service. For 
example, PHS Act section 2715(d)(4) requires a plan or issuer to give 
60 days advance notice to an enrollee before any material modification 
will become effective.
---------------------------------------------------------------------------

    \5\ For example, if a recommendation of the United States 
Preventive Services Task Force is downgraded from a rating of A or B 
to a rating of C or D, or if a recommendation or guideline no longer 
includes a particular item or service.
---------------------------------------------------------------------------

    Recommendations or guidelines in effect as of July 13, 2010 are 
described in section V later in this preamble. Any change to a 
recommendation or guideline that has--at any point since September 23, 
2009--been included in the recommended preventive services will be 
noted at http://www.HealthCare.gov/center/regulations/prevention.html. 
As described above, new recommendations and guidelines will also be 
noted at this site and plans and issuers need not make changes to 
coverage and cost-sharing requirements based on a new recommendation or 
guideline until the first plan year (in the individual market, policy 
year) beginning on or after the date that is one year after the new 
recommendation or guideline went into effect. Therefore, by visiting 
this site once per year, plans or issuers will have straightforward 
access to all the information necessary to determine any additional 
items or services that must be covered without cost-sharing 
requirements, or to determine any items or services that are no longer 
required to be covered.
    The Affordable Care Act gives authority to the Departments to 
develop guidelines for group health plans and health insurance issuers 
offering group or individual health insurance coverage to utilize 
value-based insurance designs as part of their offering of preventive 
health services. Value-based insurance designs include the provision of 
information and incentives for consumers that promote access to and use 
of higher value providers, treatments, and services. The Departments 
recognize the important role that value-based insurance design can play 
in promoting the use of appropriate preventive services. These interim 
final regulations, for example, permit plans and issuers to implement 
designs that seek to foster better quality and efficiency by allowing 
cost-sharing for recommended preventive services delivered on an out-
of-network basis while eliminating cost-sharing for recommended 
preventive health services delivered on an in-network basis. The 
Departments are developing additional guidelines regarding the 
utilization of value-based insurance designs by group health plans and 
health insurance issuers with respect to preventive benefits. The 
Departments are seeking comments related to the development of such 
guidelines for value-based insurance designs that promote consumer 
choice of providers or services that offer the best value and quality, 
while ensuring access to critical, evidence-based preventive services.
    The requirements to cover recommended preventive services without 
any cost-sharing requirements do not apply to grandfathered health 
plans. See 26 CFR 54.9815-1251T, 29 CFR 2590.715-1251, and 45 CFR 
147.140 (75 FR 34538, June 17, 2010).

III. Interim Final Regulations and Request for Comments

    Section 9833 of the Code, section 734 of ERISA, and section 2792 of 
the PHS

[[Page 41730]]

Act authorize the Secretaries of the Treasury, Labor, and HHS 
(collectively, the Secretaries) to promulgate any interim final rules 
that they determine are appropriate to carry out the provisions of 
chapter 100 of the Code, part 7 of subtitle B of title I of ERISA, and 
part A of title XXVII of the PHS Act, which include PHS Act sections 
2701 through 2728 and the incorporation of those sections into ERISA 
section 715 and Code section 9815.
    In addition, under Section 553(b) of the Administrative Procedure 
Act (APA) (5 U.S.C. 551 et seq.) a general notice of proposed 
rulemaking is not required when an agency, for good cause, finds that 
notice and public comment thereon are impracticable, unnecessary, or 
contrary to the public interest. The provisions of the APA that 
ordinarily require a notice of proposed rulemaking do not apply here 
because of the specific authority granted by section 9833 of the Code, 
section 734 of ERISA, and section 2792 of the PHS Act. However, even if 
the APA were applicable, the Secretaries have determined that it would 
be impracticable and contrary to the public interest to delay putting 
the provisions in these interim final regulations in place until a full 
public notice and comment process was completed. As noted above, the 
preventive health service provisions of the Affordable Care Act are 
applicable for plan years (in the individual market, policy years) 
beginning on or after September 23, 2010, six months after date of 
enactment. Had the Departments published a notice of proposed 
rulemaking, provided for a 60-day comment period, and only then 
prepared final regulations, which would be subject to a 60-day delay in 
effective date, it is unlikely that it would have been possible to have 
final regulations in effect before late September, when these 
requirements could be in effect for some plans or policies. Moreover, 
the requirements in these interim final regulations require significant 
lead time in order to implement. These interim final regulations 
require plans and issuers to provide coverage for preventive services 
listed in certain recommendations and guidelines without imposing any 
cost-sharing requirements. Preparations presumably would have to be 
made to identify these preventive services. With respect to the changes 
that would be required to be made under these interim final 
regulations, group health plans and health insurance issuers subject to 
these provisions have to be able to take these changes into account in 
establishing their premiums, and in making other changes to the designs 
of plan or policy benefits, and these premiums and plan or policy 
changes would have to receive necessary approvals in advance of the 
plan or policy year in question.
    Accordingly, in order to allow plans and health insurance coverage 
to be designed and implemented on a timely basis, regulations must be 
published and available to the public well in advance of the effective 
date of the requirements of the Affordable Care Act. It is not possible 
to have a full notice and comment process and to publish final 
regulations in the brief time between enactment of the Affordable Care 
Act and the date regulations are needed.
    The Secretaries further find that issuance of proposed regulations 
would not be sufficient because the provisions of the Affordable Care 
Act protect significant rights of plan participants and beneficiaries 
and individuals covered by individual health insurance policies and it 
is essential that participants, beneficiaries, insureds, plan sponsors, 
and issuers have certainty about their rights and responsibilities. 
Proposed regulations are not binding and cannot provide the necessary 
certainty. By contrast, the interim final regulations provide the 
public with an opportunity for comment, but without delaying the 
effective date of the regulations.
    For the foregoing reasons, the Departments have determined that it 
is impracticable and contrary to the public interest to engage in full 
notice and comment rulemaking before putting these interim final 
regulations into effect, and that it is in the public interest to 
promulgate interim final regulations.

IV. Economic Impact

    Under Executive Order 12866 (58 FR 51735), a ``significant'' 
regulatory action is subject to review by the Office of Management and 
Budget (OMB). Section 3(f) of the Executive Order 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 $100 million or 
more in any one year, or adversely and materially affecting a sector of 
the economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local or tribal governments or communities 
(also referred to as ``economically significant''); (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 novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in the Executive Order. OMB has 
determined that this regulation is economically significant within the 
meaning of section 3(f)(1) of the Executive Order, because it is likely 
to have an annual effect on the economy of $100 million in any one 
year. Accordingly, OMB has reviewed these rules pursuant to the 
Executive Order. The Departments provide an assessment of the potential 
costs, benefits, and transfers associated with these interim final 
regulations, summarized in the following table.

                                      TABLE 1--Accounting Table (2011-2013)
----------------------------------------------------------------------------------------------------------------
 
-----------------------------------------------------------------------------------------------------------------
Benefits:
Qualitative: By expanding coverage and eliminating cost sharing for the recommended preventive services, the
 Departments expect access and utilization of these services to increase. To the extent that individuals
 increase their use of these services the Departments anticipate several benefits: (1) prevention and reduction
 in transmission of illnesses as a result of immunization and screening of transmissible diseases; (2) delayed
 onset, earlier treatment, and reduction in morbidity and mortality as a result of early detection, screening,
 and counseling; (3) increased productivity and fewer sick days; and (4) savings from lower health care costs.
 Another benefit of these interim final regulations will be to distribute the cost of preventive services more
 equitably across the broad insured population.
Costs:
Qualitative: New costs to the health care system result when beneficiaries increase their use of preventive
 services in response to the changes in coverage and cost-sharing requirements of preventive services. The
 magnitude of this effect on utilization depends on the price elasticity of demand and the percentage change in
 prices facing those with reduced cost sharing or newly gaining coverage.
Transfers:

[[Page 41731]]

 
Qualitative: Transfers will occur to the extent that costs that were previously paid out-of-pocket for certain
 preventive services will now be covered by group health plans and issuers under these interim final
 regulations. Risk pooling in the group market will result in sharing expected cost increases across an entire
 plan or employee group as higher average premiums for all enrollees. However, not all of those covered will
 utilize preventive services to an equivalent extent. As a result, these interim final regulations create a
 small transfer from those paying premiums in the group market utilizing less than the average volume of
 preventive services in their risk pool to those whose utilization is greater than average. To the extent there
 is risk pooling in the individual market, a similar transfer will occur.
----------------------------------------------------------------------------------------------------------------

A. The Need for Federal Regulatory Action

    As discussed later in this preamble, there is current 
underutilization of preventive services, which stems from three main 
factors. First, due to turnover in the health insurance market, health 
insurance issuers do not currently have incentives to cover preventive 
services, whose benefits may only be realized in the future when an 
individual may no longer be enrolled. Second, many preventive services 
generate benefits that do not accrue immediately to the individual that 
receives the services, making the individual less likely to take-up, 
especially in the face of direct, immediate costs. Third, some of the 
benefits of preventive services accrue to society as a whole, and thus 
do not get factored into an individual's decision-making over whether 
to obtain such services.
    These interim final regulations address these market failures 
through two avenues. First, they require coverage of recommended 
preventive services by non-grandfathered group health plans and health 
insurance issuers in the group and individual markets, thereby 
overcoming plans' lack of incentive to invest in these services. 
Second, they eliminate cost-sharing requirements, thereby removing a 
barrier that could otherwise lead an individual to not obtain such 
services, given the long-term and partially external nature of 
benefits.
    These interim final regulations are necessary in order to provide 
rules that plan sponsors and issuers can use to determine how to 
provide coverage for certain preventive health care services without 
the imposition of cost sharing in connection with these services.

B. PHS Act Section 2713, Coverage of Preventive Health Services (26 CFR 
54.9815-2713T, 29 CFR 2590.715-2713, 45 CFR 147.130)

1. Summary
    As discussed earlier in this preamble, PHS Act section 2713, as 
added by the Affordable Care Act, and these interim final regulations 
require a group health plan and a health insurance issuer offering 
group or individual health insurance coverage to provide benefits for 
and prohibit the imposition of cost-sharing requirements with respect 
to the following preventive health services:
     Evidence-based items or services that have in effect a 
rating of A or B in the current recommendations of the United States 
Preventive Services Task Force (Task Force). While these guidelines 
will change over time, for the purposes of this impact analysis, the 
Departments utilized currently available guidelines, which include 
blood pressure and cholesterol screening, diabetes screening for 
hypertensive patients, various cancer and sexually transmitted 
infection screenings, and counseling related to aspirin use, tobacco 
cessation, obesity, and other topics.
     Immunizations for routine use in children, adolescents, 
and adults that have in effect a recommendation from the Advisory 
Committee on Immunization Practices of the Centers for Disease Control 
and Prevention (Advisory Committee) with respect to the individual 
involved.
     With respect to infants, children, and adolescents, 
evidence-informed preventive care and screenings provided for in the 
comprehensive guidelines supported by the Health Resources and Services 
Administration (HRSA).
     With respect to women, evidence-informed preventive care 
and screening provided for in comprehensive guidelines supported by 
HRSA (not otherwise addressed by the recommendations of the Task 
Force). The Department of HHS is developing these guidelines and 
expects to issue them no later than August 1, 2011.
2. Preventive Services
    For the purposes of this analysis, the Departments used the 
relevant recommendations of the Task Force and Advisory Committee and 
current HRSA guidelines as described in section V later in this 
preamble. In addition to covering immunizations, these lists include 
such services as blood pressure and cholesterol screening, diabetes 
screening for hypertensive patients, various cancer and sexually 
transmitted infection screenings, genetic testing for the BRCA gene, 
adolescent depression screening, lead testing, autism testing, and oral 
health screening and counseling related to aspirin use, tobacco 
cessation, and obesity.
3. Estimated Number of Affected Entities
    For purposes of the new requirements in the Affordable Care Act 
that apply to group health plans and health insurance issuers in the 
group and individual markets, the Departments have defined a large 
group health plan as an employer plan with 100 or more workers and a 
small group plan as an employer plan with less than 100 workers. The 
Departments estimated that there are approximately 72,000 large and 2.8 
million small ERISA-covered group health plans with an estimated 97.0 
million participants in large group plans and 40.9 million participants 
in small group plans.\6\ The Departments estimate that there are 
126,000 governmental plans with 36.1 million participants in large 
plans and 2.3 million participants in small plans.\7\ The Departments 
estimate there are 16.7 million individuals under age 65 covered by 
individual health insurance policies.\8\
---------------------------------------------------------------------------

    \6\ All participant counts and the estimates of individual 
policies are from the U.S. Department of Labor, EBSA calculations 
using the March 2008 Current Population Survey Annual Social and 
Economic Supplement and the 2008 Medical Expenditure Panel Survey.
    \7\ Estimate is from the 2007 Census of Government.
    \8\ US Census Bureau, Current Population Survey, March 2009.
---------------------------------------------------------------------------

    As described in the Departments' interim final regulations relating 
to status as a grandfathered health plan,\9\ the Affordable Care Act 
preserves the ability of individuals to retain coverage under a group 
health plan or health insurance coverage in which the individual was 
enrolled on March 23, 2010 (a grandfathered health plan). Group health 
plans, and group and individual health insurance coverage, that are 
grandfathered health plans do not have to meet the requirements of 
these interim final regulations. Therefore, only plans and issuers 
offering group and individual health insurance coverage that are not 
grandfathered health plans will be affected by these interim final 
regulations.
---------------------------------------------------------------------------

    \9\ 75 FR 34538 (June 17, 2010).

---------------------------------------------------------------------------

[[Page 41732]]

    Plans can choose to relinquish their grandfather status in order to 
make certain otherwise permissible changes to their plans.\10\ The 
Affordable Care Act provides plans with the ability to maintain 
grandfathered status in order to promote stability for consumers while 
allowing plans and sponsors to make reasonable adjustments to lower 
costs and encourage the efficient use of services. Based on an analysis 
of the changes plans have made over the past few years, the Departments 
expect that more plans will choose to make these changes over time and 
therefore the number of grandfathered health plans is expected to 
decrease. Correspondingly, the number of plans and policies affected by 
these interim final regulations is likely to increase over time. In 
addition, the number of individuals receiving the benefits of the 
Affordable Care Act is likely to increase over time. The Departments' 
mid-range estimate is that 18 percent of large employer plans and 30 
percent of small employer plans would relinquish grandfather status in 
2011, increasing over time to 45 percent and 66 percent respectively by 
2013, although there is substantial uncertainty surrounding these 
estimates.\11\
---------------------------------------------------------------------------

    \10\ See 75 FR 34538 (June 17, 2010).
    \11\ See 75 FR 34538 (June 17, 2010) for a detailed description 
of the derivation of the estimates for the percentages of 
grandfathered health plans. In brief, the Departments used data from 
the 2008 and 2009 Kaiser Family Foundations/Health Research and 
Educational Trust survey of employers to estimate the proportion of 
plans that made changes in cost-sharing requirements that would have 
caused them to relinquish grandfather status if those same changes 
were made in 2011, and then applied a set of assumptions about how 
employer behavior might change in response to the incentives created 
by the grandfather regulations to estimate the proportion of plans 
likely to relinquish grandfather status. The estimates of changes in 
2012 and 2013 were calculated by using the 2011 calculations and 
assuming that an identical percentage of plan sponsors will 
relinquish grandfather status in each year.
---------------------------------------------------------------------------

    Using the mid-range assumptions, the Departments estimate that in 
2011, roughly 31 million people will be enrolled in group health plans 
subject to the prevention provisions in these interim final 
regulations, growing to approximately 78 million in 2013.\12\ The mid-
range estimates suggest that approximately 98 million individuals will 
be enrolled in grandfathered group health plans in 2013, many of which 
already cover preventive services (see discussion of the extent of 
preventive services coverage in employer-sponsored plans later in this 
preamble).
---------------------------------------------------------------------------

    \12\ To estimate the number of individuals covered in 
grandfathered health plans, the Departments extended the analysis 
described in 75 FR 34538, and estimated a weighted average of the 
number of employees in grandfathered health plans in the large 
employer and small employer markets separately, weighting by the 
number of employees in each employer's plan. Estimates for the large 
employer and small employer markets were then combined, using the 
estimates supplied above that there are 133.1 million covered lives 
in the large group market, and 43.2 million in the small group 
market.
---------------------------------------------------------------------------

    In the individual market, one study estimated that 40 percent to 67 
percent of individual policies terminate each year. Because all newly 
purchased individual policies are not grandfathered, the Departments 
expect that a large proportion of individual policies will not be 
grandfathered, covering up to and perhaps exceeding 10 million 
individuals.\13\
---------------------------------------------------------------------------

    \13\ Adele M. Kirk. The Individual Insurance Market: A Building 
Block for Health Care Reform? Health Care Financing Organization 
Research Synthesis. May 2008.
---------------------------------------------------------------------------

    However, not all of the individuals potentially affected by these 
interim final regulations will directly benefit given the prevalence 
and variation in insurance coverage today. State laws will affect the 
number of entities affected by all or some provision of these interim 
final regulations, since plans, policies, and enrollees in States that 
already have certain requirements will be affected to different 
degrees.\14\ For instance, 29 States require that health insurance 
issuers cover most or all recommended immunizations for children.\15\ 
Of these 29 States, 18 States require first-dollar coverage of 
immunizations so that the insurers pay for immunizations without a 
deductible and 12 States exempt immunizations from copayments (e.g., 
$5, $10, or $20 per vaccine) or coinsurance (e.g., 10 percent or 20 
percent of charges). State laws also require coverage of certain other 
preventive health services. Every State except Utah mandates coverage 
for some type of breast cancer screening for women. Twenty-eight States 
mandate coverage for some cervical cancer screening and 13 States 
mandate coverage for osteoporosis screening.\16\
---------------------------------------------------------------------------

    \14\ Of note, State insurance requirements do not apply to self-
insured group health plans, whose participants and beneficiaries 
make up 57 percent of covered employees (in firms with 3 or more 
employees) in 2009 according to a major annual survey of employers 
due to ERISA preemption of State insurance laws. See e.g., Kaiser 
Family Foundation and Health Research and Education Trust, Employer 
Health Benefits 2009 Annual Survey (2009).
    \15\ See e.g., American Academy of Pediatrics, State Legislative 
Report (2009).
    \16\ See Kaiser Family Foundation, www.statehealthfacts.org.
---------------------------------------------------------------------------

    Estimation of the number of entities immediately affected by some 
or all provisions of these interim final regulations is further 
complicated by the fact that, although not all States require insurance 
coverage for certain preventive services, many health plans have 
already chosen to cover these services. For example, most health plans 
cover most childhood and some adult immunizations contained in the 
recommendations from the Advisory Committee. A survey of small, medium 
and large employers showed that 78 percent to 80 percent of their point 
of service, preferred provider organization (PPO), and health 
maintenance organization (HMO) health plans covered childhood 
immunizations and 57 percent to 66 percent covered influenza vaccines 
in 2001.\17\ All 61 health plans (HMOs and PPOs) responding to a 2005 
America's Health Insurance Plans (AHIP) survey covered childhood 
immunizations \18\ in their best-selling products and almost all health 
plans (60 out of 61) covered diphtheria-tetanus-pertussis vaccines and 
influenza vaccines for adults.\19\ A survey of private and public 
employer health plans found that 84 percent covered influenza vaccines 
in 2002-2003.\20\
---------------------------------------------------------------------------

    \17\ See e.g., Mary Ann Bondi et. al., ``Employer Coverage of 
Clinical Preventive Services in the United States,'' American 
Journal of Health Promotion, 20(3), pp. 214-222 (2006).
    \18\ The specific immunizations include: DTaP (diphtheria and 
tetanus toxoids and acellular Pertussis), Hib (Haemophilus influenza 
type b), Hepatitis B, inactivated polio, influenza, MMR (measles, 
mumps, and rubella), pneumococcal, and varicella vaccine.
    \19\ McPhillips-Tangum C., Rehm B., Hilton O. ``Immunization 
practices and policies: A survey of health insurance plans.'' AHIP 
Coverage. 47(1), 32-7 (2006).
    \20\ See e.g., Matthew M. Davis et. al., ``Benefits Coverage for 
Adult Vaccines in Employer-Sponsored Health Plans,'' University of 
Michigan for the CDC National Immunizations Program (2003).
---------------------------------------------------------------------------

    Similarly, many health plans already cover preventive services 
today, but there are differences in the coverage of these services in 
the group and individual markets. According to a 2009 survey of 
employer health benefits, over 85 percent of employer-sponsored health 
insurance plans covered preventive services without having to meet a 
deductible.\21\ Coverage of preventive services does vary slightly by 
employer size, with large employers being more likely to cover such 
services than small employers.\22\ In contrast, coverage of preventive 
services is less prevalent and varies more significantly in the 
individual market.\23\ For PPOs,

[[Page 41733]]

only 66.2 percent of single policies purchased covered adult physicals, 
while 94.1 percent covered cancer screenings.\24\
---------------------------------------------------------------------------

    \21\ See e.g., Kaiser Family Foundation and Health Research and 
Education Trust, Employer Health Benefits 2009 Annual Survey (2009) 
available at http://ehbs.kff.org/pdf/2009/7936.pdf.
    \22\ See e.g., Mary Ann Bondi et. al., ``Employer Coverage of 
Clinical Preventive Services in the United States,'' American 
Journal of Health Promotion, 20(3), pp. 214-222 (2006).
    \23\ See e.g., Matthew M. Davis et. al., ``Benefits Coverage for 
Adult Vaccines in Employer-Sponsored Health Plans,'' University of 
Michigan for the CDC National Immunizations Program (2003).
    \24\ See Individual Health Insurance 2006-2007: A Comprehensive 
Survey of Premiums, Availability, and Benefits. Available at http://www.ahipresearch.org/pdfs/Individual_Market_Survey_December_2007.pdf.
---------------------------------------------------------------------------

    In summary, the number of affected entities depends on several 
factors, such as whether a health plan retains its grandfather status, 
the number of new health plans, whether State benefit requirements for 
preventive services apply, and whether plans or issuers voluntarily 
offer coverage and/or no cost sharing for recommended preventive 
services. In addition, participants, beneficiaries, and enrollees in 
such plans or health insurance coverage will be affected in different 
ways: Some will newly gain coverage for recommended preventive 
services, while others will have the cost sharing that they now pay for 
such services eliminated. As such, there is considerable uncertainty 
surrounding estimation of the number of entities affected by these 
interim final regulations.
4. Benefits
    The Departments anticipate that four types of benefits will result 
from these interim final regulations. First, individuals will 
experience improved health as a result of reduced transmission, 
prevention or delayed onset, and earlier treatment of disease. Second, 
healthier workers and children will be more productive with fewer 
missed days of work or school. Third, some of the recommended 
preventive services will result in savings due to lower health care 
costs. Fourth, the cost of preventive services will be distributed more 
equitably.
    By expanding coverage and eliminating cost sharing for recommended 
preventive services, these interim final regulations could be expected 
to increase access to and utilization of these services, which are not 
used at optimal levels today. Nationwide, almost 38 percent of adult 
residents over 50 have never had a colorectal cancer screening (such as 
a sigmoidoscopy or a colonoscopy) \25\ and almost 18 percent of women 
over age 18 have not been screened for cervical cancer in the past 
three years.\26\ Vaccination rates for childhood vaccines are generally 
high due to State laws requiring certain vaccinations for children to 
enter school, but recommended childhood vaccines that are not subject 
to State laws and adult vaccines have lower vaccination rates (e.g., 
the meningococcal vaccination rate among teenagers is 42 percent).\27\ 
Studies have shown that improved coverage of preventive services leads 
to expanded utilization of these services,\28\ which would lead to 
substantial benefits as discussed further below.
---------------------------------------------------------------------------

    \25\ This differs from the Task Force recommendation that 
individuals aged 50-75 receive fecal occult blood testing, 
sigmoidoscopy, or colonoscopy screening for colorectal cancer.
    \26\ For Behavioral Risk Factor Surveillance System Numbers see 
e.g. Centers for Disease Control and Prevention (CDC). Behavioral 
Risk Factor Surveillance System Survey Data. Atlanta, Georgia: U.S. 
Department of Health and Human Services, Centers for Disease Control 
and Prevention, (2008) at http://apps.nccd.cdc.gov/BRFSS/page.asp?cat=CC&yr=2008&state=UB#CC.
    \27\ See http://www.cdc.gov/vaccines/stats-surv/imz-coverage.htm#nis for vaccination rates.
    \28\ See e.g., Jonathan Gruber, The Role of Consumer Copayments 
for Health Care: Lessons from the RAND Health Insurance Experiment 
and Beyond, Kaiser Family Foundation (Oct. 2006). This paper 
examines an experiment in which copays randomly vary across several 
thousand individuals. The author finds that individuals are 
sensitive to prices for health services--i.e. as copays decline, 
more services are demanded. See e.g., Sharon Long, ``On the Road to 
Universal Coverage: Impacts of Reform in Massachusetts At One 
Year,'' Health Affairs, Volume 27, Number 4 (June 2008). The author 
investigated the case of Massachusetts, where coverage of preventive 
services became a requirement in 2007, and found that for 
individuals under 300 percent of the poverty line, doctor visits for 
preventive care increased by 6.1 percentage points in the year after 
adoption, even after controlling for observable characteristics. 
Additionally, the incidence of individuals citing cost as the reason 
for not receiving preventive screenings declined by 2.8 percentage 
points from 2006 to 2007. In the Massachusetts case, these 
preventive care services were not necessarily free; therefore, 
economists would expect a higher differential under these interim 
final rules because of the price sensitivity of health care usage.
---------------------------------------------------------------------------

    In addition, these interim final regulations limit preventive 
service coverage under this provision to services recommended by the 
Task Force, Advisory Committee, and HRSA. The preventive services given 
a grade of A or B by the Task Force have been determined by the Task 
Force to have at least fair or good \29\ evidence that the preventive 
service improves important health outcomes and that benefits outweigh 
harms in the judgment of an independent panel of private sector experts 
in primary care and prevention.\30\ Similarly, the mission of the 
Advisory Committee is to provide advice that will lead to a reduction 
in the incidence of vaccine preventable diseases in the United States, 
and an increase in the safe use of vaccines and related biological 
products. The comprehensive guidelines for infants, children, and 
adolescents supported by HRSA are developed by multidisciplinary 
professionals in the relevant fields to provide a framework for 
improving children's health and reducing morbidity and mortality based 
on a review of the relevant evidence. The statute and interim final 
regulations limit the preventive services covered to those recommended 
by the Task Force, Advisory Committee, and HRSA because the benefits of 
these preventive services will be higher than others that may be 
popular but unproven.
---------------------------------------------------------------------------

    \29\ The Task Force defines good and fair evidence as follows. 
Good: Evidence includes consistent results from well-designed, well-
conducted studies in representative populations that directly assess 
effects on health outcomes.
    Fair: Evidence is sufficient to determine effects on health 
outcomes, but the strength of the evidence is limited by the number, 
quality or consistency of the individual studies, generalizability 
to routine practice or indirect nature of the evidence on health 
outcomes. See http://www.ahrq.gov/clinic/uspstf/gradespre.htm#drec.
    \30\ See http://www.ahrq.gov/clinic/uspstf/gradespre.htm#drec 
for details of the Task Force grading.
---------------------------------------------------------------------------

    Research suggests significant health benefits from a number of the 
preventive services that would be newly covered with no cost sharing by 
plans and issuers under the statute and these interim final 
regulations. A recent article in JAMA stated, ``By one account, 
increasing delivery of just five clinical preventive services would 
avert 100,000 deaths per year.'' \31\ These five services are all items 
and services recommended by the Task Force, Advisory Committee, and/or 
the comprehensive guidelines supported by HRSA. The National Council on 
Prevention Priorities (NCPP) estimated that almost 150,000 lives could 
potentially be saved by increasing the 2005 rate of utilization to 90 
percent for eight of the preventive services recommended by the Task 
Force or Advisory Committee.\32\ Table 2 shows eight of the services 
and the number of lives potentially saved if utilization of preventive 
services were to increase to 90 percent.
---------------------------------------------------------------------------

    \31\ Woolf, Steven. A Closer Look at the Economic Argument for 
Disease Prevention. JAMA 2009;301(5):536-538.
    \32\ See National Commission on Prevention Priorities. 
Preventive Care: A National Profile on Use, Disparities, and Health 
Benefits. Partnership for Prevention, August 2007 at http://www.prevent.org/content/view/129/72/#citations accessed on 6/22/
2010. Lives saved were estimated using models previously developed 
to rank clinical preventive services. See Maciosek MV, Edwards NM, 
Coffield AB, Flottemesch TJ, Nelson WW, Goodman MJ, Rickey DA, 
Butani AB, Solberg LI. Priorities among effective clinical 
preventive services: methods. Am J Prev Med 2006; 31(1):90-96.

[[Page 41734]]



         TABLE 2.--Lives Saved From Increasing Utilization of Selected Preventive Services to 90 Percent
----------------------------------------------------------------------------------------------------------------
                                                                                                   Lives saved
                                                                                                   annually if
                                                                                   Percent           percent
                                                                                  utilizing         utilizing
            Preventive service                      Population group             preventive        preventive
                                                                              service in  2005       service
                                                                                                increased to  90
                                                                                                     percent
----------------------------------------------------------------------------------------------------------------
Regular aspirin use.......................  Men 40+ and women 50+...........                40            45,000
Smoking cessation advice and help to quit.  All adult smokers...............                28            42,000
Colorectal cancer screening...............  Adults 50+......................                48            14,000
Influenza vaccination.....................  Adults 50+......................                37            12,000
Cervical cancer screening in the past 3     Women 18-64.....................                83               620
 years.
Cholesterol screening.....................  Men 35+ and women 45+...........                79             2,450
Breast cancer screening in the past 2       Women 40+.......................                67             3,700
 years.
Chlamydia screening.......................  Women 16-25.....................                40            30,000
----------------------------------------------------------------------------------------------------------------
Source: National Commission on Prevention Priorities, 2007.

    Since financial barriers are not the only reason for sub-optimal 
utilization rates, population-wide utilization of preventive services 
is unlikely to increase to the 90 percent level assumed in Table 2 as a 
result of these interim final regulations. Current utilization of 
preventive services among insured populations varies widely, but the 
Departments expect that utilization will increase among those 
individuals in plans affected by the regulation because the provisions 
eliminate cost sharing and require coverage for these services.
    These interim final regulations are expected to increase the take-
up rate of preventive services and are likely, over time, to lead 
physicians to increase their use of these services knowing that they 
will be covered, and covered with zero copayment. In the absence of 
data on the elasticity of demand for these specific services, it is 
difficult to know precisely how many more patients will use these 
services. Evidence from studies comparing the utilization of preventive 
services such as blood pressure and cholesterol screening between 
insured and uninsured individuals with relatively high incomes suggests 
that coverage increases usage rates in a wide range between three and 
30 percentage points, even among those likely to be able to afford 
basic preventive services out-of-pocket.\33\ A reasonable assumption is 
that the average increase in utilization of these services will be 
modest, perhaps on the order of 5 to 10 percentage points for some of 
them. For services that are generally covered without cost sharing in 
the current market, the Departments would expect minimal change in 
utilization.
---------------------------------------------------------------------------

    \33\ The Commonwealth Fund. ``Insurance Coverage and the Receipt 
of Preventive Care.'' 2005. http://www.commonwealthfund.org/Content/Performance-Snapshots/Financial-and-Structural-Access-to-Care/Insurance-Coverage-and-Receipt-of-Preventive-Care.aspx.
---------------------------------------------------------------------------

    Preventive services' benefits have also been evaluated 
individually. Effective cancer screening, early treatment, and 
sustained risk reduction could reduce the death rate due to cancer by 
29 percent.\34\ Improved blood sugar control could reduce the risk for 
eye disease, kidney disease and nerve disease by 40 percent in people 
with Type 1 or Type 2 diabetes.\35\
---------------------------------------------------------------------------

    \34\ Curry, Susan J., Byers, Tim, and Hewitt, Maria, eds. 2003. 
Fulfilling the Potential of Cancer Prevention and Early Detection. 
Washington, DC: National Academies Press.
    \35\ Centers for Disease Control and Prevention. 2010. Diabetes 
at a Glance. See http://www.cdc.gov/chronicdisease/resources/publications/aag/pdf/2010/diabetes_aag.pdf.
---------------------------------------------------------------------------

    Some recommended preventive services have both individual and 
public health value. Vaccines have reduced or eliminated serious 
diseases that, prior to vaccination, routinely caused serious illnesses 
or deaths. Maintaining high levels of immunization in the general 
population protects the un-immunized from exposure to the vaccine-
preventable disease, so that individuals who cannot receive the vaccine 
or who do not have a sufficient immune response to the vaccine to 
protect against the disease are indirectly protected.\36\
---------------------------------------------------------------------------

    \36\ See Modern Infectious Disease Epidemiology by Johan 
Giesecke 1994, Chapter 18, The Epidemiology of Vaccination.
---------------------------------------------------------------------------

    A second type of benefit from these interim final regulations is 
improved workplace productivity and decreased absenteeism for school 
children. Numerous studies confirm that ill health compromises worker 
output and that health prevention efforts can improve worker 
productivity. For example, one study found that 69 million workers 
reported missing days due to illness and 55 million workers reported a 
time when they were unable to concentrate at work because of their own 
illness or a family member's illness.\37\ Together, labor time lost due 
to health reasons represents lost economic output totaling $260 billion 
per year.\38\ Prevention efforts can help prevent these types of 
losses. Studies have also shown that reduced cost-sharing for medical 
services results in fewer restricted-activity days at work,\39\ and 
increased access to health insurance coverage improves labor market 
outcomes by improving worker health.\40\ Thus, the expansion of 
benefits and the elimination of cost sharing for preventive services as 
provided in these

[[Page 41735]]

interim final regulations can be expected to have substantial 
productivity benefits in the labor market.
---------------------------------------------------------------------------

    \37\ Health and Productivity Among U.S. Workers, Karen Davis, 
Ph.D., Sara R. Collins, Ph.D., Michelle M. Doty, Ph.D., Alice Ho, 
and Alyssa L. Holmgren, The Commonwealth Fund, August 2005 http://www.commonwealthfund.org/Content/Publications/Issue-Briefs/2005/Aug/Health-and-Productivity-Among-U-S-Workers.aspx.
    \38\ Ibid.
    \39\ See e.g., RAND, The Health Insurance Experiment: A Classic 
RAND Study Speaks to the Current Health Care Reform Debate, Rand 
Research Brief, Number 9174 (2006), at http://www.rand.org/pubs/research_briefs/2006/RAND_RB9174.pdf and Janet Currie et al., 
``Has Public Health Insurance for Older Children Reduced Disparities 
in Access to Care and Health Outcomes?'', Journal of Health 
Economics, Volume 27, Issue 6, pages 1567-1581 (Dec. 2008). With 
early childhood interventions, there appear to be improved health 
outcomes in later childhood. Analogously, health interventions in 
early adulthood could have benefits for future productivity.
    \40\ In a RAND policy brief, the authors cite results from the 
RAND Health Insurance Experiment in which cost-sharing is found to 
correspond with workers having fewer restricted-activity days--
evidence that free care for certain services may be productivity 
enhancing. See e.g., RAND, The Health Insurance Experiment: A 
Classic RAND Study Speaks to the Current Health Care Reform Debate, 
Rand Research Brief, Number 9174 (2006), at http://www.rand.org/pubs/research_briefs/2006/RAND_RB9174.pdf. See e.g. Janet Currie 
et. al., ``Has Public Health Insurance for Older Children Reduced 
Disparities in Access to Care and Health Outcomes?'' Journal of 
Health Economics, Volume 27, Issue 6, pages 1567-1581 (Dec. 2008). 
With early childhood interventions, there appears to be improved 
health outcomes in later childhood. Analogously, health 
interventions in early adulthood could have benefits for future 
productivity. Council of Economic Advisers. ``The Economic Case for 
Health Reform.'' (2009).
---------------------------------------------------------------------------

    Illnesses also contribute to increased absenteeism among school 
children, which could be avoided with recommended preventive services. 
In 2006, 56 percent of students missed between one and five days of 
school due to illness, 10 percent missed between six and ten days and 
five percent missed 11 or more days.\41\ Obesity in particular 
contributes to missed school days: One study from the University of 
Pennsylvania found that overweight children were absent on average 20 
percent more than their normal-weight peers.\42\ Studies also show that 
influenza contributes to school absenteeism, and vaccination can reduce 
missed school days and indirectly improve community health.\43\ These 
interim final regulations will ensure that children have access to 
preventive services, thus decreasing the number of days missed due to 
illness.\44\ Similarly, regular pediatric care, including care by 
physicians specializing in pediatrics, can improve child health 
outcomes and avert preventable health care costs. For example, one 
study of Medicaid enrolled children found that when children were up to 
date for their age on their schedule of well-child visits, they were 
less likely to have an avoidable hospitalization at a later time.\45\
---------------------------------------------------------------------------

    \41\ Bloom B, Cohen RA. Summary health statistics for U.S. 
children: National Health Interview Survey, 2006. Vital Health Stat 
2007;10(234). Available at http://www.cdc.gov/nchs/nhis.htm.
    \42\ University of Pennsylvania 2007: http://www.upenn.edu/pennnews/news/childhood-obesity-indicates-greater-risk-school-absenteeism-university-pennsylvania-study-revea.
    \43\ Davis, Mollie M., James C. King, Ginny Cummings, and 
Laurence S. Madger. ``Countywide School-Based Influenza 
Immunization: Direct and Indirect Impact on Student Absenteeism.'' 
Pediatrics 122.1 (2008).
    \44\ Moonie, Sheniz, David A. Sterling, Larry Figgs, and Mario 
Castro. ``Asthma Status and Severity Affects Missed School Days.'' 
Journal of School Health 76.1 (2006): 18-24.
    \45\ Bye, ``Effectiveness of Compliance with Pediatric 
Preventative Care Guidelines Among Medicaid Beneficiaries.''
---------------------------------------------------------------------------

    A third type of benefit from some preventive services is cost 
savings. Increasing the provision of preventive services is expected to 
reduce the incidence or severity of illness, and, as a result, reduce 
expenditures on treatment of illness. For example, childhood 
vaccinations have generally been found to reduce such expenditures by 
more than the cost of the vaccinations themselves and generate 
considerable benefits to society. Researchers at the Centers for 
Disease Control and Prevention (CDC) studying the economic impact of 
DTaP (diphtheria and tetanus toxoids and acellular Pertussis), Td 
(tetanus and diphtheria toxoids), Hib (Haemophilus influenza type b), 
IPV (inactivated poliovirus), MMR (measles, mumps and rubella), 
Hepatitis B and varicella routine childhood vaccines found that every 
dollar spent on immunizations in 2001 was estimated to save $5.30 on 
direct health care costs and $16.50 on total societal costs of the 
diseases as they are prevented or reduced (direct health care 
associated with the diseases averted were $12.1 billion and total 
societal costs averted were $33.9 billion).\46\
---------------------------------------------------------------------------

    \46\ Fangjun Zhou, Jeanne Santoli, Mark L. Messonnier, Hussain 
R. Yusuf, Abigail Shefer, Susan Y. Chu, Lance Rodewald, Rafael 
Harpaz. Economic Evaluation of the 7-Vaccine Routine Childhood 
Immunization Schedule in the United States. Archives of Pediatric 
and Adolescent Medicine 2005; 159(12): 1136-1144. The estimates of 
the cost savings are based on current immunization levels. The 
incremental impact of increasing immunization rates is likely to be 
smaller, but still significant and positive.
---------------------------------------------------------------------------

    A review of preventive services by the National Committee on 
Prevention Priorities found that, in addition to childhood 
immunizations, two of the recommended preventive services--discussing 
aspirin use with high-risk adults and tobacco use screening and brief 
intervention--are cost-saving on net.\47\ By itself, tobacco use 
screening with a brief intervention was found to save more than $500 
per smoker.\48\
---------------------------------------------------------------------------

    \47\ Maciosek MV, Coffield AB, Edwards NM, Coffield AB, 
Flottemesch TJ, Goodman MJ, Solberg LI. Priorities among effective 
clinical preventive services: Results of a Systematic Review and 
Analysis. Am J Prev Med 2006; 31(1):52-61.
    \48\ Solberg LI, Maciosek, MV, Edwards NM, Khanchandani HS, and 
Goodman MJ. Repeated tobacco-use screening and intevention in 
clinical practice: Health impact and cost effectiveness. American 
Journal of Preventive Medicine. 2006;31(1).
---------------------------------------------------------------------------

    Another area where prevention could achieve savings is obesity 
prevention and reduction. Obesity is widely recognized as an important 
driver of higher health care expenditures.\49\ The Task Force 
recommends children over age six and adults be screened for obesity and 
be offered or referred to counseling to improve weight status or 
promote weight loss. Increasing obesity screening and referrals to 
counseling should decrease obesity and its related costs. If providers 
are able to proactively identify and monitor obesity in child patients, 
they may reduce the incidence of adult health conditions that can be 
expensive to treat, such as diabetes, hypertension, and adult 
obesity.\50\ One recent study estimated that a one-percentage-point 
reduction in obesity among twelve-year-olds would save $260.4 million 
in total medical expenditures.\51\
---------------------------------------------------------------------------

    \49\ Congressional Budget Office. ``Technological Change and the 
Growth of Health Care Spending.'' January 2008. Box 1, pdf p. 18. 
http://www.cbo.gov/ftpdocs/89xx/doc8947/01-31-TechHealth.pdf.
    \50\ ``Working Group Report on Future Research Directions in 
Childhood Obesity Prevention and Treatment.'' National Heart, Lung 
and Blood Institute, National Institutes of Health, U.S. Department 
of Health and Human Services (2007), available at http://www.nhlbi.nih.gov/meetings/workshops/child-obesity/index.htm.
    \51\ Ibid.
---------------------------------------------------------------------------

    A full quantification of the cost savings from the extension of 
coverage of preventive services in these interim final regulations is 
not possible, but to illustrate the potential savings, an assessment of 
savings from obesity reduction was conducted. According to the CDC, in 
2008, 34.2 percent of U.S. adults and 16.9 percent of children were 
obese (defined as having a body mass index (BMI) of 30.0 or 
greater).\52\ Obesity is associated with increased risk for coronary 
heart disease, hypertension, stroke, type 2 diabetes, several types of 
cancer, diminished mobility, and social stigmatization.\53\ As a 
result, obesity is widely recognized as an important driver of higher 
health care expenditures on an individual \54\ and national level.\55\
---------------------------------------------------------------------------

    \52\ Centers for Disease Control and Prevention. ``Obesity and 
Overweight.'' 2010. http://www.cdc.gov/nchs/fastats/overwt.htm.
    \53\ Agency for Healthcare Research and Quality (AHRQ). 
``Screening for Obesity in Adults.'' December 2003. http://www.ahrq.gov/clinic/3rduspstf/obesity/obesrr.pdf.
    \54\ Thorpe, Kenneth E. ``The Future Costs of Obesity: National 
and State Estimates of the Impact of Obesity on Direct Health Care 
Expenses.'' November 2009; McKinsey Global Institute. ``Sample data 
suggest that obese adults can incur nearly twice the annual health 
care costs of normal-weight adults.'' 2007.
    \55\ Congressional Budget Office. ``Technological Change and the 
Growth of Health Care Spending.'' January 2008. Box 1, pdf p. 18. 
http://www.cbo.gov/ftpdocs/89xx/doc8947/01-31-TechHealth.pdf.
---------------------------------------------------------------------------

    As described below, the Departments' analysis assumes that the 
utilization of preventive services will increase when they are covered 
with zero copayment, and these interim final regulations are expected 
to increase utilization of dietary counseling services both among 
people who currently have the service covered with a copayment and 
among people for whom the service is not currently covered at all.
    Data from the 2009 Kaiser Family Foundation Employer Health 
Benefits Survey shows that 73 percent of employees with employer-
sponsored insurance from a small (< 200 employees) employer do not 
currently have coverage for weight loss programs,

[[Page 41736]]

compared to 38 percent at large firms.\56\ In the illustrative analysis 
below, the share of individuals without weight loss coverage in the 
individual market is assumed to be equal to the share in the small 
group market.
---------------------------------------------------------------------------

    \56\ Kaiser Family Foundation. 2009 Employer Health Benefits 
Annual Survey. Public Use File provided to CEA; documentation of 
statistical analysis available upon request. See http://ehbs.kff.org.
---------------------------------------------------------------------------

    The size of the increase in the number of individuals receiving 
dietary counseling or other weight loss services will be limited by 
current physician practice patterns, in which relatively few 
individuals who are obese receive physician recommendations for dietary 
counseling. In one study of patients at an internal medicine clinic in 
the Bronx, NY, approximately 15 percent of obese patients received a 
recommendation for dietary counseling.\57\ Similarly, among overweight 
and obese patients enrolled in the Cholesterol Education and Research 
Trial, approximately 15 to 20 percent were referred to nutrition 
counseling.\58\
---------------------------------------------------------------------------

    \57\ Davis NJ, Emerenini A, Wylie-Rosett J. ``Obesity 
management: physician practice patterns and patient preference,'' 
Diabetes Education. 2006 Jul-Aug; 32(4):557-61.
    \58\ Molly E. Waring, PhD, Mary B. Roberts, MS, Donna R. Parker, 
ScD and Charles B. Eaton, MD, MS. ``Documentation and Management of 
Overweight and Obesity in Primary Care,'' The Journal of the 
American Board of Family Medicine 22 (5): 544-552 (2009).
---------------------------------------------------------------------------

    These interim final regulations are expected to increase the take-
up rate of counseling among patients who are referred to it, and may, 
over time, lead physicians to increase their referral to such 
counseling, knowing that it will be covered, and covered without cost 
sharing. The effect of these interim final regulations is expected to 
be magnified because of the many other public and private sector 
initiatives dedicated to combating the obesity epidemic.
    In the absence of data on take-up of counseling among patients who 
are referred by their physicians, it is difficult to know what fraction 
of the estimated 15 percent to 20 percent of patients who are currently 
referred to counseling follow through on that referral, or how that 
fraction will change after coverage of these services is expanded. A 
reasonable assumption is that utilization of dietary counseling among 
patients who are obese might increase by five to 10 percentage points 
as a result of these interim final regulations. If physicians change 
their behavior and increase the rate at which they refer to counseling, 
the effect might be substantially larger.
    The share of obese individuals without weight loss coverage is 
estimated to be 29 percent.\59\ It is assumed that obese individuals 
have health care costs 39 percent above average, based on a McKinsey 
Global Institute analysis.\60\ The Task Force noted that counseling 
interventions led to sustained weight loss ranging from four percent to 
eight percent of body weight, although there is substantial 
heterogeneity in results across interventions, with many interventions 
having little long-term effect.\61\ Assuming midpoint reduction of six 
percent of body weight, the BMI for an individual taking up such an 
intervention would fall by six percent as well, as height would remain 
constant. Based on the aforementioned McKinsey Global Institute 
analysis, a six percent reduction in BMI for an obese individual (from 
32 to around 30, for example) would result in a reduction in health 
care costs of approximately five percent. This parameter for cost 
reduction is subject to considerable uncertainty, given the wide range 
of potential weight loss strategies with varying degrees of impact on 
BMI, and their interconnectedness with changes in individual health 
care costs.
---------------------------------------------------------------------------

    \59\ This estimate is constructed using a weighted average 
obesity rate taking into account the share of the population aged 0 
to 19 and 20 to 74 and their respective obesity rates, derived from 
Census Bureau and Centers for Disease Control and Prevention data. 
U.S. Census Bureau. ``Current Population Survey (CPS) Table 
Creator.'' 2010. http://www.census.gov/hhes/www/cpstc/cps_table_creator.html. Centers for Disease Control and Prevention. ``Obesity 
and Overweight.'' 2010. http://www.cdc.gov/nchs/fastats/overwt.htm.
    \60\ McKinsey Global Institute Analysis provided to CEA.
    \61\ Agency for Healthcare Research and Quality (AHRQ). 
``Screening for Obesity in Adults.'' December 2003. p. 4. http://www.ahrq.gov/clinic/3rduspstf/obesity/obesrr.pdf.
---------------------------------------------------------------------------

    Multiplying the percentage reduction in health care costs by the 
total premiums of obese individuals newly gaining obesity prevention 
coverage allows for an illustrative calculation of the total dollar 
reduction in premiums, and dividing by total premiums for the affected 
population allows for an estimate of the reduction in average premiums 
across the entire affected population. Doing so results in a potential 
private premium reduction of 0.05 percent to 0.1 percent from lower 
health care costs due to a reduction in obesity for enrollees in non-
grandfathered plans. This does not account for potential savings in 
Medicaid, Medicare, or other health programs.
    A fourth benefit of these interim final regulations will be to 
distribute the cost of preventive services more equitably across the 
broad insured population. Some Americans in plans affected by these 
regulations currently have no coverage of certain recommended 
preventive services, and pay for them entirely out-of-pocket. For some 
individuals who currently have no coverage of certain recommended 
preventive services, these interim final regulations will result in a 
large savings in out-of-pocket payments, and only a small increase in 
premiums. Many other Americans have limited coverage of certain 
recommended preventive services, with large coinsurance or deductibles, 
and also make substantial out-of-pocket payments to obtain preventive 
services. Some with limited coverage of preventive services will also 
experience large savings as a result of these interim final 
regulations. Reductions in out-of-pocket costs are expected to be 
largest among people in age groups in which relatively expensive 
preventive services are most likely to be recommended.
5. Costs and Transfers
    The changes in how plans and issuers cover the recommended 
preventive services resulting from these interim final regulations will 
result in changes in covered benefits and premiums for individuals in 
plans and health insurance coverage subject to these interim final 
regulations. New costs to the health system result when beneficiaries 
increase their use of preventive services in response to the changes in 
coverage of preventive services. Cost sharing, including coinsurance, 
deductibles, and copayments, divides the costs of health services 
between the insurer and the beneficiaries. The removal of cost sharing 
increases the quantity of services demanded by lowering the direct cost 
of the service to consumers. Therefore, the Departments expect that the 
statute and these interim final regulations will increase utilization 
of the covered preventive services. The magnitude of this effect on 
utilization depends on the price elasticity of demand.
    Several studies have found that individuals are sensitive to prices 
for health services.\62\ Evidence that consumers change their 
utilization of preventive services is available from CDC researchers 
who studied out-of-pocket costs of immunizations for

[[Page 41737]]

privately insured children up to age 5 in families in Georgia in 2003, 
to find that a one percent increase in out-of-pocket costs for routine 
immunizations (DTaP, IPV, MMR, Hib, and Hep B) was associated with a 
0.07 percent decrease in utilization.\63\
---------------------------------------------------------------------------

    \62\ See e.g., Jonathan Gruber, The Role of Consumer Copayments 
for Health Care: Lessons from the RAND Health Insurance Experiment 
and Beyond, Kaiser Family Foundation (Oct. 2006). This paper 
examines an experiment in which copays randomly vary across several 
thousand individuals. The author finds that individuals are 
sensitive to prices for health services--i.e., as copays decline, 
more services are demanded.
    \63\ See e.g., Noelle-Angelique Molinari et al., ``Out-of-Pocket 
Costs of Childhood Immunizations: A Comparison by Type of Insurance 
Plan,'' Pediatrics, 120(5) pp. 148-156 (2006).
---------------------------------------------------------------------------

    Along with new costs of induced utilization, there are transfers 
associated with these interim final regulations. A transfer is a change 
in who pays for the services, where there is not an actual change in 
the level of resources used. For example, costs that were previously 
paid out-of-pocket for certain preventive services will now be covered 
by plans and issuers under these interim final regulations. Such a 
transfer of costs could be expected to lead to an increase in premiums.
a. Estimate of Average Changes in Health Insurance Premiums
    The Departments assessed the impact of eliminating cost sharing, 
increases in services covered, and induced utilization on the average 
insurance premium using a model to evaluate private health insurance 
plans against a nationally representative population. The model is 
based on the Medical Expenditure Panel Survey data from 2004, 2005, and 
2006 on household spending on health care, which are scaled to levels 
consistent with the CMS projections of the National Health Expenditure 
Accounts.\64\ This data is combined with data from the Employer Health 
Benefits Surveys conducted by the Kaiser Family Foundation and Health 
Research and Education Trust to model a ``typical PPO coverage'' plan. 
The model then allows the user to assess changes in covered expenses, 
benefits, premiums, and induced utilization of services resulting from 
changes in the characteristics of the plan. The analysis of changes in 
coverage is based on the average per-person covered expenses and 
insurance benefits. The average covered expense is the total charge for 
covered services; insurance benefits are the part of the covered 
expenses covered by the insurer. The effect on the average premium is 
then estimated based on the percentage changes in the insurance 
benefits and the distribution of the individuals across individual and 
group markets in non-grandfathered plans. The Departments assume that 
the percent increase for insurance benefits and premiums will be the 
same. This is based on two assumptions: (1) That administrative costs 
included in the premium will increase proportionally with the increase 
in insurance benefits; and (2) that the increases in insurance benefits 
will be directly passed on to the consumer in the form of higher 
premiums. These assumptions bias the estimates of premium changes 
upward. Using this model, the Departments assessed: (1) Changes in 
cost-sharing for currently covered and utilized services, (2) changes 
in services covered, and (3) induced utilization of preventive 
services. There are several additional sources of uncertainty 
concerning these estimates. First, there is no accurate, granular data 
on exactly what baseline coverage is for the particular preventive 
services addressed in these interim final regulations. Second, there is 
uncertainty over behavioral assumptions related to additional 
utilization that results from reduced cost-sharing. Therefore, after 
providing initial estimates, the Departments provide a sensitivity 
analysis to capture the potential range of impacts of these interim 
final regulations.
---------------------------------------------------------------------------

    \64\ The National Health Expenditure Accounts (NHEA) are the 
official estimates of total health care spending in the United 
States. See http://www.cms.gov/NationalHealthExpendData/02_NationalHealthAccountsHistorical.asp.
---------------------------------------------------------------------------

    From the Departments' analysis of the Medical Expenditure Panel 
Survey (MEPS) data, controlled to be consistent with projections of the 
National Health Expenditure Accounts, the average person with employer-
sponsored insurance (ESI) has $264 in covered expenses for preventive 
services, of which $240 is paid by insurance, and $24 is paid out-of-
pocket.\65\ When preventive services are covered with zero copayment, 
the Departments expect the average preventive benefit (holding 
utilization constant) will increase by $24. This is a 0.6 percent 
increase in insurance benefits and premiums for plans that have 
relinquished their grandfather status. A similar, but larger effect is 
expected in the individual market because existing evidence suggests 
that individual health insurance policies generally have less generous 
benefits for preventive services than group health plans. However, the 
evidence base for current coverage and cost sharing for preventive 
services in individual health insurance policies is weaker than for 
group health plans, making estimation of the increase in average 
benefits and premiums in the individual market highly uncertain.
---------------------------------------------------------------------------

    \65\ The model does not distinguish between recommended and non-
recommended preventive services, and so this likely represents an 
overestimate of the insurance benefits for preventive services.
---------------------------------------------------------------------------

    For analyses of changes in covered services, the Departments used 
the Blue Cross/Blue Shield Standard (BC/BS) plan offered through the 
Federal Employees Health Benefits Program as an average plan.\66\ Other 
analyses have used the BC/BS standard option as an average plan as it 
was designed to reflect standard practice within employer-sponsored 
health insurance plans.\67\ BC/BS covers most of the preventive 
services listed in the Task Force and Advisory Committee 
recommendations, and most of the preventive services listed in the 
comprehensive guidelines for infants, children, and adolescents 
supported by HRSA. Not covered by the BC/BS Standard plan are the 
recommendations for genetic testing for the BRCA gene, adolescent 
depression screening,\68\ lead testing, autism testing, and oral health 
screening.\69\
---------------------------------------------------------------------------

    \66\ The Blue Cross Blue Shield standard option plan 
documentation is available online at http://fepblue.org/benefitplans/standard-option/index.html.
    \67\ Frey A, Mika S, Nuzum R, and Schoen C. ``Setting a National 
Minimum Standard for Health Benefits: How do State Benefit Mandates 
Compare with Benefits in Large-Group Plans?'' Issue Brief. 
Commonwealth Fund June 2009 available at http://www.commonwealthfund.org/Content/Publications/Issue-Briefs/2009/Jun/Setting-a-National-Minimum-Standard-for-Health-Benefits.aspx.
    \68\ The Task Force recommends that women whose family history 
is associated with an increased risk for deleterious mutations in 
BRCA1 or BRCA2 genes be referred for genetic counseling and 
evaluation for BRCA testing and screening of adolescents (12-18 
years of age) for major depressive disorder (MDD) when systems are 
in place to ensure accurate diagnosis, psychotherapy (cognitive-
behavioral or interpersonal), and follow-up.
    \69\ Lead, autism, and oral health screening are from the HRSA 
comprehensive guidelines.
---------------------------------------------------------------------------

    The Departments estimated the increase in benefits from newly 
covered services by estimating the number of new services that would be 
provided times the cost of providing the services, and then spread 
these new costs across the total insured population. The Departments 
estimated that adding coverage for genetic screening and depression 
screening would increase insurance benefits an estimated 0.10 percent. 
Adding lead testing, autism testing, and oral health screening would 
increase insurance benefits by an estimated 0.02 percent. This results 
in a total average increase in insurance benefits on these services of 
0.12 percent, or just over $4 per insured person. This increase 
represents a mixture of new costs and transfers, dependent on whether 
beneficiaries previously would have purchased these services on their 
own. It is also important to remember that actual plan

[[Page 41738]]

impacts will vary depending on baseline benefit levels, and that 
grandfathered health plans will not experience any impact from these 
interim final regulations. The Departments expect the increase to be 
larger in the individual market because coverage of preventive services 
in the individual market is less complete than coverage in the group 
market, but as noted previously, the evidence base for the individual 
market is weaker than that of the group market, making detailed 
estimates of the size of this effect difficult and highly uncertain.
    Actuaries use an ``induction formula'' to estimate the behavioral 
change in response to changes in the relative levels of coverage for 
health services. For this analysis, the Departments used the model to 
estimate the induced demand (the increased use of preventive services). 
The model uses a standard actuarial formula for induction 1/
(1+alpha*P), where alpha is the ``induction parameter'' and P is the 
average fraction of the cost of services paid by the consumer. The 
induction parameter for physician services is 0.7, derived by the 
standard actuarial formula that is generally consistent with the 
estimates of price elasticity of demand from the RAND Health Insurance 
Experiment and other economic studies.\70\ Removing cost sharing for 
preventive services lowers the direct cost to consumers of using 
preventive services, which induces additional utilization, estimated 
with the model above to increase covered expenses and benefits by 
approximately $17, or 0.44 percent in insurance benefits in group 
health plans. The Departments expect a similar but larger effect in the 
individual market, although these estimates are highly uncertain.
---------------------------------------------------------------------------

    \70\ Standard formula best described in ``Quantity-Price 
Relationships in Health Insurance'', Charles L Trowbridge, Chief 
Actuary, Social Security Administration (DHEW Publication No. 
(SSA)73-11507, November 1972).
---------------------------------------------------------------------------

    The Departments calculated an estimate of the average impact using 
the information from the analyses described above, using estimates of 
the number of individuals in non-grandfathered health plans in the 
group and individual markets in 2011. The Departments estimate that 
premiums will increase by approximately 1.5 percent on average for 
enrollees in non-grandfathered plans. This estimate assumes that any 
changes in insurance benefits will be directly passed on to the 
consumer in the form of changes in premiums. As mentioned earlier, this 
assumption biases the estimates of premium change upward.
b. Sensitivity analysis
    As discussed previously, there is substantial uncertainty 
associated with the estimates presented above. To address the 
uncertainty in the group market, the Departments first varied the 
estimated change to underlying benefits, to address the particular 
uncertainty behind the estimate of baseline coverage of preventive 
services in the group market. The estimate for the per person annual 
increase in insurance benefits from adding coverage for new services is 
approximately $4. The Departments considered the impact of a smaller 
and larger addition in benefits of approximately $2 and $6 per person. 
To consider the impact of uncertainty around the size of the behavioral 
change (that is, the utilization of more services when cost sharing is 
eliminated), the Departments analyzed the impact on insurance benefits 
if the behavioral change were 15 percent smaller and 15 percent larger.
    In the individual market, to accommodate the greater uncertainty 
relative to the group market, the Departments considered the impact of 
varying the increase in benefits resulting from cost shifting due to 
the elimination of cost sharing, in addition to varying the cost of 
newly covered services and behavioral change.
    Combining results in the group and individual markets for enrollees 
in non-grandfathered plans, the Departments' low-end is a few tenths of 
a percent lower than the mid-range estimate of approximately 1.5 
percent, and the high-end estimate is a few tenths of a percent higher. 
Grandfathered health plans are not subject to these interim final 
regulations and therefore would not experience this premium change.
6. Alternatives Considered
    Several provisions in these interim final regulations involved 
policy choices. One was whether to allow a plan or issuer to impose 
cost sharing for an office visit when a recommended preventive service 
is provided in that visit. Sometimes a recommended preventive service 
is billed separately from the office visit; sometimes it is not. The 
Departments decided that the cost sharing prohibition of these interim 
final regulations applies to the specific preventive service as 
recommended by the guidelines. Therefore, if the preventive service is 
billed separately from the office visit, it is the preventive service 
that has cost sharing waived, not the entire office visit.
    A second policy choice was if the preventive service is not billed 
separately from the office visit, whether these interim final 
regulations should prohibit cost sharing for any office visit in which 
any recommended preventive service was administered, or whether cost 
sharing should be prohibited only when the preventive service is the 
primary purpose of the office visit. Prohibiting cost sharing for 
office visits when any recommended preventive service is provided, 
regardless of the primary purpose of the visit, could lead to an overly 
broad application of these interim final regulations; for example, a 
person who sees a specialist for a particular condition could end up 
with a zero copayment simply because his or her blood pressure was 
taken as part of the office visit. This could create financial 
incentives for consumers to request preventive services at office 
visits that are intended for other purposes in order to avoid 
copayments and deductibles. The increased prevalence of the application 
of zero cost sharing would lead to increased premiums compared with the 
chosen option, without a meaningful additional gain in access to 
preventive services.
    A third issue involves health plans that have differential cost 
sharing for services provided by providers who are in and out of their 
networks. These interim final regulations provide that a plan or issuer 
is not required to provide coverage for recommended preventive services 
delivered by an out-of-network provider. The plan or issuer may also 
impose cost sharing for recommended preventive services delivered by an 
out-of-network provider. The Departments considered that requiring 
coverage by out-of-network providers at no cost sharing would result in 
higher premiums for these interim final regulations. Plans and issuers 
negotiate allowed charges with in-network providers as a way to promote 
effective, efficient health care, and allowing differences in cost 
sharing in- and out-of-network enables plans to encourage use of in-
network providers. Allowing zero cost sharing for out of network 
providers could reduce providers' incentives to participate in insurer 
networks. The Departments decided that permitting cost sharing for 
recommended preventive services provided by out-of-network providers is 
the appropriate option to preserve choice of providers for individuals, 
while avoiding potentially larger increases in costs and transfers as 
well as potentially lower quality care.

C. Regulatory Flexibility Act--Department of Labor and Department of 
Health and Human Services

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes

[[Page 41739]]

certain requirements with respect to Federal rules that are subject to 
the notice and comment requirements of section 553(b) of the APA (5 
U.S.C. 551 et seq.) and that are likely to have a significant economic 
impact on a substantial number of small entities. Section 9833 of the 
Code, section 734 of ERISA, and section 2792 of the PHS Act authorize 
the Secretaries to promulgate any interim final rules that they 
determine are appropriate to carry out the provisions of chapter 100 of 
the Code, part 7 of subtitle B or title I of ERISA, and part A of title 
XXVII of the PHS Act, which include PHS Act sections 2701 through 2728 
and the incorporation of those sections into ERISA section 715 and Code 
section 9815.
    Moreover, under Section 553(b) of the APA, a general notice of 
proposed rulemaking is not required when an agency, for good cause, 
finds that notice and public comment thereon are impracticable, 
unnecessary, or contrary to the public interest. These interim final 
regulations are exempt from APA, because the Departments made a good 
cause finding that a general notice of proposed rulemaking is not 
necessary earlier in this preamble. Therefore, the RFA does not apply 
and the Departments are not required to either certify that the rule 
would not have a significant economic impact on a substantial number of 
small entities or conduct a regulatory flexibility analysis.
    Nevertheless, the Departments carefully considered the likely 
impact of the rule on small entities in connection with their 
assessment under Executive Order 12866. Consistent with the policy of 
the RFA, the Departments encourage the public to submit comments that 
suggest alternative rules that accomplish the stated purpose of the 
Affordable Care Act and minimize the impact on small entities.

D. Special Analyses--Department of the Treasury

    Notwithstanding the determinations of the Department of Labor and 
Department of Health and Human Services, for purposes of the Department 
of the Treasury, it has been determined that this Treasury decision is 
not a significant regulatory action for purposes of Executive Order 
12866. Therefore, a regulatory assessment is not required. It has also 
been determined that section 553(b) of the APA (5 U.S.C. chapter 5) 
does not apply to these interim final regulations. For the 
applicability of the RFA, refer to the Special Analyses section in the 
preamble to the cross-referencing notice of proposed rulemaking 
published elsewhere in this issue of the Federal Register. Pursuant to 
section 7805(f) of the Code, these temporary regulations have been 
submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comment on their impact on small businesses.

E. Paperwork Reduction Act: Department of Labor, Department of the 
Treasury, and Department of Health and Human Services

    These interim final regulations are not subject to the requirements 
of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.) because 
it does not contain a ``collection of information'' as defined in 44 
U.S.C. 3502 (11).

F. Congressional Review Act

    These interim final regulations are subject to the Congressional 
Review Act provisions of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (5 U.S.C. 801 et seq.) and have been transmitted 
to Congress and the Comptroller General for review.

G. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires 
agencies to prepare several analytic statements before proposing any 
rules that may result in annual expenditures of $100 million (as 
adjusted for inflation) by State, local and tribal governments or the 
private sector. These interim final regulations are not subject to the 
Unfunded Mandates Reform Act because they are being issued as interim 
final regulations. However, consistent with the policy embodied in the 
Unfunded Mandates Reform Act, these interim final regulations have been 
designed to be the least burdensome alternative for State, local and 
tribal governments, and the private sector, while achieving the 
objectives of the Affordable Care Act.

H. Federalism Statement--Department of Labor and Department of Health 
and Human Services

    Executive Order 13132 outlines fundamental principles of 
federalism, and requires the adherence to specific criteria by Federal 
agencies in the process of their formulation and implementation of 
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 
regulation.
    In the Departments' view, these interim final regulations have 
federalism implications, because they have direct effects on the 
States, the relationship between the national government and States, or 
on the distribution of power and responsibilities among various levels 
of government. However, in the Departments' view, the federalism 
implications of these interim final regulations are substantially 
mitigated because, with respect to health insurance issuers, the 
Departments expect that the majority of States will enact laws or take 
other appropriate action resulting in their meeting or exceeding the 
Federal standards.
    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 HIPAA requirements 
(including those of the Affordable Care Act) 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 health insurance 
coverage except to the extent that such standard or requirement 
prevents the application of a requirement'' of a Federal standard. The 
conference report accompanying HIPAA indicates that this is intended to 
be the ``narrowest'' preemption of State laws. (See House Conf. Rep. 
No. 104-736, at 205, reprinted in 1996 U.S. Code Cong. & Admin. News 
2018.) States may continue to apply State law requirements except to 
the extent that such requirements prevent the application of the 
Affordable Care Act requirements that are the subject of this 
rulemaking. State insurance laws that are more stringent than the 
Federal requirements are unlikely to ``prevent the application of'' the 
Affordable Care Act, and be preempted. Accordingly, States have 
significant latitude to impose requirements on health insurance issuers 
that are more restrictive than the Federal law.
    In compliance with the requirement of Executive Order 13132 that 
agencies examine closely any policies that may have federalism 
implications or limit

[[Page 41740]]

the policy making discretion of the States, the Departments have 
engaged in efforts to consult with and work cooperatively with affected 
State and local officials, including attending conferences of the 
National Association of Insurance Commissioners and consulting with 
State insurance officials on an individual basis. It is expected that 
the Departments will act in a similar fashion in enforcing the 
Affordable Care Act requirements. Throughout the process of developing 
these interim final regulations, to the extent feasible within the 
specific preemption provisions of HIPAA as it applies to the Affordable 
Care Act, 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.
    Pursuant to the requirements set forth in section 8(a) of Executive 
Order 13132, and by the signatures affixed to these interim final 
regulations, the Departments certify that the Employee Benefits 
Security Administration and the Centers for Medicare & Medicaid 
Services have complied with the requirements of Executive Order 13132 
for the attached regulations in a meaningful and timely manner.

V. Recommended Preventive Services as of July 14, 2010

    The materials that follow list recommended preventive services, 
current as of July 14, 2010, that will have to be covered without cost-
sharing when delivered by an in-network provider. In many cases, the 
recommendations or guidelines went into effect before September 23, 
2009; therefore the recommended services must be covered under these 
interim final regulations in plan years (in the individual market, 
policy years) that begin on or after September 23, 2010. However, there 
are some services that appear in the figure that are based on 
recommendations or guidelines that went into effect at some point later 
than September 23, 2009. Those services do not have to be covered under 
these interim final regulations until plan years (in the individual 
market, policy years) that begin at some point later than September 23, 
2010. In addition, there are a few recommendations and guidelines that 
went into effect after September 23, 2009 and are not included in the 
figure. In both cases, information at http://www.HealthCare.gov/center/regulations/prevention.html specifically identifies those services and 
the relevant dates. The materials at http://www.HealthCare.gov/center/regulations/prevention.html will be updated on an ongoing basis, and 
will contain the most current recommended preventive services.

A. Recommendations of the United States Preventive Services Task Force 
(Task Force)

    Recommendations of the Task Force appear in a chart that follows. 
This chart includes a description of the topic, the text of the Task 
Force recommendation, the grade the recommendation received (A or B), 
and the date that the recommendation went into effect.

B. Recommendations of the Advisory Committee On Immunization Practices 
(Advisory Committee) That Have Been Adopted by the Director of the 
Centers for Disease Control and Prevention

    Recommendations of the Advisory Committee appear in four 
immunization schedules that follow: A schedule for children age 0 to 6 
years, a schedule for children age 7 to 18 years, a ``catch-up'' 
schedule for children, and a schedule for adults. Immunization 
schedules are issued every year, and the schedules that appear here are 
the 2010 schedules. The schedules contain graphics that provide 
information about the recommended age for vaccination, number of doses 
needed, interval between the doses, and (for adults) recommendations 
associated with particular health conditions. In addition to the 
graphics, the schedules contain detailed footnotes that provide further 
information on each immunization in the schedule.

C. Comprehensive Guidelines Supported by the Health Resources and 
Services Administration (HRSA) for Infants, Children, and Adolescents

    Comprehensive guidelines for infants, children, and adolescents 
supported by HRSA appear in two charts that follow: The Periodicity 
Schedule of the Bright Futures Recommendations for Pediatric Preventive 
Health Care, and the Uniform Panel of the Secretary's Advisory 
Committee on Heritable Disorders in Newborns and Children.
BILLING CODE 4830-01-P; 4510-29-P; 4210-01-P

[[Page 41741]]

[GRAPHIC] [TIFF OMITTED] TR19JY10.024


[[Page 41742]]


[GRAPHIC] [TIFF OMITTED] TR19JY10.025


[[Page 41743]]


[GRAPHIC] [TIFF OMITTED] TR19JY10.026


[[Page 41744]]


[GRAPHIC] [TIFF OMITTED] TR19JY10.027


[[Page 41745]]


[GRAPHIC] [TIFF OMITTED] TR19JY10.028


[[Page 41746]]


[GRAPHIC] [TIFF OMITTED] TR19JY10.029


[[Page 41747]]


[GRAPHIC] [TIFF OMITTED] TR19JY10.030


[[Page 41748]]


[GRAPHIC] [TIFF OMITTED] TR19JY10.031


[[Page 41749]]


[GRAPHIC] [TIFF OMITTED] TR19JY10.032


[[Page 41750]]


[GRAPHIC] [TIFF OMITTED] TR19JY10.033


[[Page 41751]]


[GRAPHIC] [TIFF OMITTED] TR19JY10.034


[[Page 41752]]


[GRAPHIC] [TIFF OMITTED] TR19JY10.035


[[Page 41753]]


[GRAPHIC] [TIFF OMITTED] TR19JY10.036


[[Page 41754]]


[GRAPHIC] [TIFF OMITTED] TR19JY10.037


[[Page 41755]]


[GRAPHIC] [TIFF OMITTED] TR19JY10.038

BILLING CODE 4830-01-C; 4510-29-C; 4210-01-C

VI. Statutory Authority

    The Department of the Treasury temporary regulations are adopted 
pursuant to the authority contained in sections 7805 and 9833 of the 
Code.

[[Page 41756]]

    The Department of Labor interim final regulations are adopted 
pursuant to the authority contained in 29 U.S.C. 1027, 1059, 1135, 
1161-1168, 1169, 1181-1183, 1181 note, 1185, 1185a, 1185b, 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; Secretary of Labor's Order 6-2009, 74 FR 21524 (May 7, 
2009).
    The Department of Health and Human Services interim final 
regulations are adopted pursuant to the authority contained in sections 
2701 through 2763, 2791, and 2792 of the PHS Act (42 USC 300gg through 
300gg-63, 300gg-91, and 300gg-92), as amended.

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.

Steven T. Miller,

Deputy Commissioner for Services and Enforcement, Internal Revenue 
Service.

    Approved: July 8, 2010
Michael F. Mundaca,

Assistant Secretary of the Treasury (Tax Policy).

    Signed this 9th day of July, 2010.
Phyllis C. Borzi,

Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.

    Dated: July 9, 2010
Jay Angoff,

Director, Office of Consumer Information and Insurance Oversight.

    Dated: July 9, 2010.
Kathleen Sebelius,

Secretary, Department of Health and Human Services.

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Chapter 1

0
Accordingly, 26 CFR Part 54 is amended as follows:

PART 54--PENSION EXCISE TAXES

0
Paragraph 1. The authority citation for part 54 is amended by adding an 
entry for Sec.  54.9815-2713T in numerical order to read in part as 
follows:

    Authority: 26 U.S.C. 7805. * * *

    Section 54.9815-2713T also issued under 26 U.S.C. 9833. * * *


0
Par. 2. Section 54.9815-2713T is added to read as follows:


Sec.  54.9815-2713T  Coverage of preventive health services 
(temporary).

    (a) Services--(1) In general. Beginning at the time described in 
paragraph (b) of this section, a group health plan, or a health 
insurance issuer offering group health insurance coverage, must provide 
coverage for all of the following items and services, and may not 
impose any cost-sharing requirements (such as a copayment, coinsurance, 
or deductible) with respect to those items or services:
    (i) 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 with respect to the individual involved 
(except as otherwise provided in paragraph (c) of this section);
    (ii) Immunizations for routine use in children, adolescents, and 
adults that have in effect a recommendation from the Advisory Committee 
on Immunization Practices of the Centers for Disease Control and 
Prevention with respect to the individual involved (for this purpose, a 
recommendation from the Advisory Committee on Immunization Practices of 
the Centers for Disease Control and Prevention is considered in effect 
after it has been adopted by the Director of the Centers for Disease 
Control and Prevention, and a recommendation is considered to be for 
routine use if it is listed on the Immunization Schedules of the 
Centers for Disease Control and Prevention);
    (iii) 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; and
    (iv) With respect to women, to the extent not described in 
paragraph (a)(1)(i) of this section, evidence-informed preventive care 
and screenings provided for in comprehensive guidelines supported by 
the Health Resources and Services Administration.
    (2) Office visits--(i) If an item or service described in paragraph 
(a)(1) of this section is billed separately (or is tracked as 
individual encounter data separately) from an office visit, then a plan 
or issuer may impose cost-sharing requirements with respect to the 
office visit.
    (ii) If an item or service described in paragraph (a)(1) of this 
section is not billed separately (or is not tracked as individual 
encounter data separately) from an office visit and the primary purpose 
of the office visit is the delivery of such an item or service, then a 
plan or issuer may not impose cost-sharing requirements with respect to 
the office visit.
    (iii) If an item or service described in paragraph (a)(1) of this 
section is not billed separately (or is not tracked as individual 
encounter data separately) from an office visit and the primary purpose 
of the office visit is not the delivery of such an item or service, 
then a plan or issuer may impose cost-sharing requirements with respect 
to the office visit.
    (iv) The rules of this paragraph (a)(2) are illustrated by the 
following examples:

    Example 1. (i) Facts. An individual covered by a group health 
plan visits an in-network health care provider. While visiting the 
provider, the individual is screened for cholesterol abnormalities, 
which has in effect a rating of A or B in the current 
recommendations of the United States Preventive Services Task Force 
with respect to the individual. The provider bills the plan for an 
office visit and for the laboratory work of the cholesterol 
screening test.
    (ii) Conclusion. In this Example 1, the plan may not impose any 
cost-sharing requirements with respect to the separately-

[[Page 41757]]

billed laboratory work of the cholesterol screening test. Because 
the office visit is billed separately from the cholesterol screening 
test, the plan may impose cost-sharing requirements for the office 
visit.
    Example 2. (i) Facts. Same facts as Example 1. As the result of 
the screening, the individual is diagnosed with hyperlipidemia and 
is prescribed a course of treatment that is not included in the 
recommendations under paragraph (a)(1) of this section.
    (ii) Conclusion. In this Example 2, because the treatment is not 
included in the recommendations under paragraph (a)(1) of this 
section, the plan is not prohibited from imposing cost-sharing 
requirements with respect to the treatment.
    Example 3. (i) Facts. An individual covered by a group health 
plan visits an in-network health care provider to discuss recurring 
abdominal pain. During the visit, the individual has a blood 
pressure screening, which has in effect a rating of A or B in the 
current recommendations of the United States Preventive Services 
Task Force with respect to the individual. The provider bills the 
plan for an office visit.
    (ii) Conclusion. In this Example 3, the blood pressure screening 
is provided as part of an office visit for which the primary purpose 
was not to deliver items or services described in paragraph (a)(1) 
of this section. Therefore, the plan may impose a cost-sharing 
requirement for the office visit charge.
    Example 4. (i) Facts. A child covered by a group health plan 
visits an in-network pediatrician to receive an annual physical exam 
described as part of the comprehensive guidelines supported by the 
Health Resources and Services Administration. During the office 
visit, the child receives additional items and services that are not 
described in the comprehensive guidelines supported by the Health 
Resources and Services Administration, nor otherwise described in 
paragraph (a)(1) of this section. The provider bills the plan for an 
office visit.
    (ii) Conclusion. In this Example 4, the service was not billed 
as a separate charge and was billed as part of an office visit. 
Moreover, the primary purpose for the visit was to deliver items and 
services described as part of the comprehensive guidelines supported 
by the Health Resources and Services Administration. Therefore, the 
plan may not impose a cost-sharing requirement with respect to the 
office visit.

    (3) Out-of-network providers. Nothing in this section requires a 
plan or issuer that has a network of providers to provide benefits for 
items or services described in paragraph (a)(1) of this section that 
are delivered by an out-of-network provider. Moreover, nothing in this 
section precludes a plan or issuer that has a network of providers from 
imposing cost-sharing requirements for items or services described in 
paragraph (a)(1) of this section that are delivered by an out-of-
network provider.
    (4) Reasonable medical management. 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 recommendation or guideline.
    (5) Services not described. Nothing in this section prohibits a 
plan or issuer from providing coverage for items and services in 
addition to those recommended by the United States Preventive Services 
Task Force or the Advisory Committee on Immunization Practices of the 
Centers for Disease Control and Prevention, or provided for by 
guidelines supported by the Health Resources and Services 
Administration, or from denying coverage for items and services that 
are not recommended by that task force or that advisory committee, or 
under those guidelines. A plan or issuer may impose cost-sharing 
requirements for a treatment not described in paragraph (a)(1) of this 
section, even if the treatment results from an item or service 
described in paragraph (a)(1) of this section.
    (b) Timing--(1) In general. A plan or issuer must provide coverage 
pursuant to paragraph (a)(1) of this section for plan years that begin 
on or after September 23, 2010, or, if later, for plan years that begin 
on or after the date that is one year after the date the recommendation 
or guideline is issued.
    (2) Changes in recommendations or guidelines. A plan or issuer is 
not required under this section to provide coverage for any items and 
services specified in any recommendation or guideline described in 
paragraph (a)(1) of this section after the recommendation or guideline 
is no longer described in paragraph (a)(1) of this section. Other 
requirements of Federal or State law may apply in connection with a 
plan or issuer ceasing to provide coverage for any such items or 
services, including PHS Act section 2715(d)(4), which requires a plan 
or issuer to give 60 days advance notice to an enrollee before any 
material modification will become effective.
    (c) Recommendations not current. For purposes of paragraph 
(a)(1)(i) of this section, and for purposes of any other provision of 
law, recommendations of the United States Preventive Services Task 
Force regarding breast cancer screening, mammography, and prevention 
issued in or around November 2009 are not considered to be current.
    (d) Effective/applicability date. The provisions of this section 
apply for plan years beginning on or after September 23, 2010. See 
Sec.  54.9815-1251T 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).
    (e) Expiration date. This section expires on July 12, 2013 or on 
such earlier date as may be provided in final regulations or other 
action published in the Federal Register.

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Chapter XXV

0
29 CFR Part 2590 is amended as follows:

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, 1185b, 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; 
Secretary of Labor's Order 6-2009, 74 FR 21524 (May 7, 2009).

Subpart C--Other Requirements

0
2. Section 2590.715-2713 is added to subpart C to read as follows:


Sec.  2590.715-2713  Coverage of preventive health services.

    (a) Services--(1) In general. Beginning at the time described in 
paragraph (b) of this section, a group health plan, or a health 
insurance issuer offering group health insurance coverage, must provide 
coverage for all of the following items and services, and may not 
impose any cost-sharing requirements (such as a copayment, coinsurance, 
or deductible) with respect to those items or services:
    (i) 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 with respect to the individual involved 
(except as otherwise provided in paragraph (c) of this section);
    (ii) Immunizations for routine use in children, adolescents, and 
adults that have in effect a recommendation from the Advisory Committee 
on Immunization Practices of the Centers for Disease Control and 
Prevention with respect to the individual involved (for this purpose, a 
recommendation from the Advisory Committee on Immunization Practices of 
the Centers for Disease Control and Prevention is considered in effect 
after it has been

[[Page 41758]]

adopted by the Director of the Centers for Disease Control and 
Prevention, and a recommendation is considered to be for routine use if 
it is listed on the Immunization Schedules of the Centers for Disease 
Control and Prevention);
    (iii) 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; and
    (iv) With respect to women, to the extent not described in 
paragraph (a)(1)(i) of this section, evidence-informed preventive care 
and screenings provided for in comprehensive guidelines supported by 
the Health Resources and Services Administration.
    (2) Office visits--(i) If an item or service described in paragraph 
(a)(1) of this section is billed separately (or is tracked as 
individual encounter data separately) from an office visit, then a plan 
or issuer may impose cost-sharing requirements with respect to the 
office visit.
    (ii) If an item or service described in paragraph (a)(1) of this 
section is not billed separately (or is not tracked as individual 
encounter data separately) from an office visit and the primary purpose 
of the office visit is the delivery of such an item or service, then a 
plan or issuer may not impose cost-sharing requirements with respect to 
the office visit.
    (iii) If an item or service described in paragraph (a)(1) of this 
section is not billed separately (or is not tracked as individual 
encounter data separately) from an office visit and the primary purpose 
of the office visit is not the delivery of such an item or service, 
then a plan or issuer may impose cost-sharing requirements with respect 
to the office visit.
    (iv) The rules of this paragraph (a)(2) are illustrated by the 
following examples:

    Example 1. (i) Facts. An individual covered by a group health 
plan visits an in-network health care provider. While visiting the 
provider, the individual is screened for cholesterol abnormalities, 
which has in effect a rating of A or B in the current 
recommendations of the United States Preventive Services Task Force 
with respect to the individual. The provider bills the plan for an 
office visit and for the laboratory work of the cholesterol 
screening test.
    (ii) Conclusion. In this Example 1, the plan may not impose any 
cost-sharing requirements with respect to the separately-billed 
laboratory work of the cholesterol screening test. Because the 
office visit is billed separately from the cholesterol screening 
test, the plan may impose cost-sharing requirements for the office 
visit.
    Example 2. (i) Facts. Same facts as Example 1. As the result of 
the screening, the individual is diagnosed with hyperlipidemia and 
is prescribed a course of treatment that is not included in the 
recommendations under paragraph (a)(1) of this section.
    (ii) Conclusion. In this Example 2, because the treatment is not 
included in the recommendations under paragraph (a)(1) of this 
section, the plan is not prohibited from imposing cost-sharing 
requirements with respect to the treatment.
    Example 3. (i) Facts. An individual covered by a group health 
plan visits an in-network health care provider to discuss recurring 
abdominal pain. During the visit, the individual has a blood 
pressure screening, which has in effect a rating of A or B in the 
current recommendations of the United States Preventive Services 
Task Force with respect to the individual. The provider bills the 
plan for an office visit.
    (ii) Conclusion. In this Example 3, the blood pressure screening 
is provided as part of an office visit for which the primary purpose 
was not to deliver items or services described in paragraph (a)(1) 
of this section. Therefore, the plan may impose a cost-sharing 
requirement for the office visit charge.
    Example 4. (i) Facts. A child covered by a group health plan 
visits an in-network pediatrician to receive an annual physical exam 
described as part of the comprehensive guidelines supported by the 
Health Resources and Services Administration. During the office 
visit, the child receives additional items and services that are not 
described in the comprehensive guidelines supported by the Health 
Resources and Services Administration, nor otherwise described in 
paragraph (a)(1) of this section. The provider bills the plan for an 
office visit.
    (ii) Conclusion. In this Example 4, the service was not billed 
as a separate charge and was billed as part of an office visit. 
Moreover, the primary purpose for the visit was to deliver items and 
services described as part of the comprehensive guidelines supported 
by the Health Resources and Services Administration. Therefore, the 
plan may not impose a cost-sharing requirement with respect to the 
office visit.

    (3) Out-of-network providers. Nothing in this section requires a 
plan or issuer that has a network of providers to provide benefits for 
items or services described in paragraph (a)(1) of this section that 
are delivered by an out-of-network provider. Moreover, nothing in this 
section precludes a plan or issuer that has a network of providers from 
imposing cost-sharing requirements for items or services described in 
paragraph (a)(1) of this section that are delivered by an out-of-
network provider.
    (4) Reasonable medical management. 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 recommendation or guideline.
    (5) Services not described. Nothing in this section prohibits a 
plan or issuer from providing coverage for items and services in 
addition to those recommended by the United States Preventive Services 
Task Force or the Advisory Committee on Immunization Practices of the 
Centers for Disease Control and Prevention, or provided for by 
guidelines supported by the Health Resources and Services 
Administration, or from denying coverage for items and services that 
are not recommended by that task force or that advisory committee, or 
under those guidelines. A plan or issuer may impose cost-sharing 
requirements for a treatment not described in paragraph (a)(1) of this 
section, even if the treatment results from an item or service 
described in paragraph (a)(1) of this section.
    (b) Timing--(1) In general. A plan or issuer must provide coverage 
pursuant to paragraph (a)(1) of this section for plan years that begin 
on or after September 23, 2010, or, if later, for plan years that begin 
on or after the date that is one year after the date the recommendation 
or guideline is issued.
    (2) Changes in recommendations or guidelines. A plan or issuer is 
not required under this section to provide coverage for any items and 
services specified in any recommendation or guideline described in 
paragraph (a)(1) of this section after the recommendation or guideline 
is no longer described in paragraph (a)(1) of this section. Other 
requirements of Federal or State law may apply in connection with a 
plan or issuer ceasing to provide coverage for any such items or 
services, including PHS Act section 2715(d)(4), which requires a plan 
or issuer to give 60 days advance notice to an enrollee before any 
material modification will become effective.
    (c) Recommendations not current. For purposes of paragraph 
(a)(1)(i) of this section, and for purposes of any other provision of 
law, recommendations of the United States Preventive Services Task 
Force regarding breast cancer screening, mammography, and prevention 
issued in or around November 2009 are not considered to be current.
    (d) Applicability date. The provisions of this section apply for 
plan years beginning on or after September 23, 2010. See Sec.  
2590.715-1251 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).

[[Page 41759]]

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Subtitle A

0
For the reasons stated in the preamble, the Department of Health and 
Human Services amends 45 CFR part 147, added May 13, 2010, at 75 FR 
27138, effective July 12, 2010, as follows:

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: Sections 2701 through 2763, 2791, and 2792 of the 
Public Health Service Act (42 U.S.C. 300gg through 300gg-63, 300gg-
91, and 300gg-92), as amended.


0
2. Add Sec.  147.130 to read as follows:


Sec.  147.130  Coverage of preventive health services.

    (a) Services--(1) In general. Beginning at the time described in 
paragraph (b) of this section, a group health plan, or a health 
insurance issuer offering group or individual health insurance 
coverage, must provide coverage for all of the following items and 
services, and may not impose any cost-sharing requirements (such as a 
copayment, coinsurance, or deductible) with respect to those items or 
services:
    (i) 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 with respect to the individual involved 
(except as otherwise provided in paragraph (c) of this section);
    (ii) Immunizations for routine use in children, adolescents, and 
adults that have in effect a recommendation from the Advisory Committee 
on Immunization Practices of the Centers for Disease Control and 
Prevention with respect to the individual involved (for this purpose, a 
recommendation from the Advisory Committee on Immunization Practices of 
the Centers for Disease Control and Prevention is considered in effect 
after it has been adopted by the Director of the Centers for Disease 
Control and Prevention, and a recommendation is considered to be for 
routine use if it is listed on the Immunization Schedules of the 
Centers for Disease Control and Prevention);
    (iii) 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; and
    (iv) With respect to women, to the extent not described in 
paragraph (a)(1)(i) of this section, evidence-informed preventive care 
and screenings provided for in comprehensive guidelines supported by 
the Health Resources and Services Administration.
    (2) Office visits--(i) If an item or service described in paragraph 
(a)(1) of this section is billed separately (or is tracked as 
individual encounter data separately) from an office visit, then a plan 
or issuer may impose cost-sharing requirements with respect to the 
office visit.
    (ii) If an item or service described in paragraph (a)(1) of this 
section is not billed separately (or is not tracked as individual 
encounter data separately) from an office visit and the primary purpose 
of the office visit is the delivery of such an item or service, then a 
plan or issuer may not impose cost-sharing requirements with respect to 
the office visit.
    (iii) If an item or service described in paragraph (a)(1) of this 
section is not billed separately (or is not tracked as individual 
encounter data separately) from an office visit and the primary purpose 
of the office visit is not the delivery of such an item or service, 
then a plan or issuer may impose cost-sharing requirements with respect 
to the office visit.
    (iv) The rules of this paragraph (a)(2) are illustrated by the 
following examples:

    Example 1. (i) Facts. An individual covered by a group health 
plan visits an in-network health care provider. While visiting the 
provider, the individual is screened for cholesterol abnormalities, 
which has in effect a rating of A or B in the current 
recommendations of the United States Preventive Services Task Force 
with respect to the individual. The provider bills the plan for an 
office visit and for the laboratory work of the cholesterol 
screening test.
    (ii) Conclusion. In this Example 1, the plan may not impose any 
cost-sharing requirements with respect to the separately-billed 
laboratory work of the cholesterol screening test. Because the 
office visit is billed separately from the cholesterol screening 
test, the plan may impose cost-sharing requirements for the office 
visit.
    Example 2.  (i) Facts. Same facts as Example 1. As the result of 
the screening, the individual is diagnosed with hyperlipidemia and 
is prescribed a course of treatment that is not included in the 
recommendations under paragraph (a)(1) of this section.
    (ii) Conclusion. In this Example 2, because the treatment is not 
included in the recommendations under paragraph (a)(1) of this 
section, the plan is not prohibited from imposing cost-sharing 
requirements with respect to the treatment.
    Example 3.  (i) Facts. An individual covered by a group health 
plan visits an in-network health care provider to discuss recurring 
abdominal pain. During the visit, the individual has a blood 
pressure screening, which has in effect a rating of A or B in the 
current recommendations of the United States Preventive Services 
Task Force with respect to the individual. The provider bills the 
plan for an office visit.
    (ii) Conclusion. In this Example 3, the blood pressure screening 
is provided as part of an office visit for which the primary purpose 
was not to deliver items or services described in paragraph (a)(1) 
of this section. Therefore, the plan may impose a cost-sharing 
requirement for the office visit charge.
    Example 4.  (i) Facts. A child covered by a group health plan 
visits an in-network pediatrician to receive an annual physical exam 
described as part of the comprehensive guidelines supported by the 
Health Resources and Services Administration. During the office 
visit, the child receives additional items and services that are not 
described in the comprehensive guidelines supported by the Health 
Resources and Services Administration, nor otherwise described in 
paragraph (a)(1) of this section. The provider bills the plan for an 
office visit.
    (ii) Conclusion. In this Example 4, the service was not billed 
as a separate charge and was billed as part of an office visit. 
Moreover, the primary purpose for the visit was to deliver items and 
services described as part of the comprehensive guidelines supported 
by the Health Resources and Services Administration. Therefore, the 
plan may not impose a cost-sharing requirement for the office visit 
charge.

    (3) Out-of-network providers. Nothing in this section requires a 
plan or issuer that has a network of providers to provide benefits for 
items or services described in paragraph (a)(1) of this section that 
are delivered by an out-of-network provider. Moreover, nothing in this 
section precludes a plan or issuer that has a network of providers from 
imposing cost-sharing requirements for items or services described in 
paragraph (a)(1) of this section that are delivered by an out-of-
network provider.
    (4) Reasonable medical management. 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 recommendation or guideline.
    (5) Services not described. Nothing in this section prohibits a 
plan or issuer from providing coverage for items and services in 
addition to those recommended by the United States Preventive Services 
Task Force or the Advisory Committee on Immunization Practices of the 
Centers for Disease Control and Prevention, or provided for by 
guidelines supported by the Health Resources and Services 
Administration, or from denying coverage for items and services that 
are not recommended by that task force or that advisory committee, or 
under those guidelines. A

[[Page 41760]]

plan or issuer may impose cost-sharing requirements for a treatment not 
described in paragraph (a)(1) of this section, even if the treatment 
results from an item or service described in paragraph (a)(1) of this 
section.
    (b) Timing--(1) In general. A plan or issuer must provide coverage 
pursuant to paragraph (a)(1) of this section 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.
    (2) Changes in recommendations or guidelines. A plan or issuer is 
not required under this section to provide coverage for any items and 
services specified in any recommendation or guideline described in 
paragraph (a)(1) of this section after the recommendation or guideline 
is no longer described in paragraph (a)(1) of this section. Other 
requirements of Federal or State law may apply in connection with a 
plan or issuer ceasing to provide coverage for any such items or 
services, including PHS Act section 2715(d)(4), which requires a plan 
or issuer to give 60 days advance notice to an enrollee before any 
material modification will become effective.
    (c) Recommendations not current. For purposes of paragraph 
(a)(1)(i) of this section, and for purposes of any other provision of 
law, recommendations of the United States Preventive Services Task 
Force regarding breast cancer screening, mammography, and prevention 
issued in or around November 2009 are not considered to be current.
    (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. 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).

[FR Doc. 2010-17242 Filed 7-14-10; 11:15 am]
BILLING CODE 4830-01-P; 4510-29-P; 4210-01-P