By Bruce Alpert, NOLA.com | Times-Picayune
WASHINGTON — A new federal rule governing the Affordable Care Act allows insurance companies providing coverage under the law to reject premium payments from charities that help people with chronic diseases obtain health care.
The CMS rule has drawn protests from groups such as the Hemophilia Federation of America that represents patients with chronic diseases, saying the rule runs afoul of the Affordable Care Act’s intent of making health insurance available to people with pre-existing conditions. Before the law, many people with pre-existing conditions or chronic illnesses couldn’t obtain affordable health coverage.
“If left to stand the providers will in effect negate the pre-existing exclusion that the Affordable Care Act brought,” said the Hemophilia Federation of America in a statement. “Patients with rare, expensive disorders will be disproportionately affected by this change.”
One provider, Blue Cross and Blue Shield of Louisiana, has cited the March Affordable Care Act rule to inform policyholders that they are no longer accepting premium payments from non-profits. The new Affordable Care rule governing charitable subsidies has also drawn a rebuke from two Louisiana lawmakers — Sen. David Vitter, R-La, and Rep. Bill Cassidy, R-Baton Rouge. Both opposed the Affordable Care Act, but say the new rule doesn’t make sense and will hurt patients.
James Romano of Patient Services Inc., which has used private donations to help pay for health care and insurance for patients with chronic illnesses for 25 years, said about 30 Louisiana Blue Cross and Blue Shield patients received a letter the insurer would no longer accept payments from his organization.
“All we’re trying to do is help people get the health care they need,” Romano said. “This is very frustrating.”
John Maginnis, spokesman for Blue Cross and Blue Shield of Louisiana, confirmed the insurer stopped accepting third-party payments from non-profits “unless otherwise required by law” on April 1.
“We implemented this as an anti-fraud measure and an attempt to maintain the integrity of the individual mandate — choice without any sort of steerage or coercion,” he said. McGinnis said in some instances medical providers have paid premiums of patients so they could collect the insurance reimbursements.
Some of the groups representing patients with chronic diseases said they suspect that Blue Cross Blue Shield is motivated by cost savings. Care for people with chronic diseases can be expensive. The hemophilia federation estimates medical costs for a patient with the disease ranges from $300,000 to $1 million a year.
McGinnis responded that the insurer has an obligation to operate “a financially stable organization so that we can pay claims for all customers.”
Advocates for people with chronic diseases fear that if the Blue Cross Blue Shield action is allowed to stand other insurers will follow.
The issue is particularly acute in Louisiana where the lowest-income residents can’t qualify for Medicaid under the expansion of the program included in the Affordable Care Act because the state declined to participate. People who would qualify for Medicaid under the expansion — fully funded for the first three years and no less than 90 percent after that — aren’t eligible for the subsidies available under the law to purchase coverage from the law’s marketplace.
Even patients who qualify for subsidies often have to buy the more expensive “gold plans,” in the exchanges because their conditions make the higher deductibles and co-pays under the lower-priced plans impractical for them.
The new interim rule, issued in March, seems to contradict a February advisory from the Centers for Medicare & Medicaid Services (CMS) that payments from private, not-for-profit foundations were permitted. The new interim rule allows payment from Ryan White HIV/AIDS programs, federal and state government provides that provide premium support and Indian tribes and tribal organizations.
But the rule says that “our new standard does not prevent” health plans providing coverage under the Affordable Care Act “from having contractual prohibitions on accepting payments of premium and cost sharing from third party payers other than those specifies in this interim final regulation.”
Vitter and Cassidy condemned the new rule, with both also criticizing the Affordable Care Act that they and other congressional Republicans seek to repeal.
“Obamacare is hurting all Louisianans but especially our most vulnerable patient populations,” Vitter said. “The skyrocketing costs have made it unaffordable for many to buy health insurance or see a doctor, but preventing charities from helping out our state’s lowest income patients is plain wrong.”
Cassidy, a physician running for the Senate, said: “We need to do as much as we can to help vulnerable patients have access to private and charitable assistance when it’s available. This Obamacare rule contradicts current law that allows charitable organizations to help Medicare patients pay for healthcare costs-creating increased amounts of uncertainty for folks in Louisiana. We need reforms that protect patients by giving them the power to make their healthcare decisions, not government.”
A CMS official said that the rule continues previous federal regulations that allowed insurers to reject payments from third party payers. But the official said its February guidance encouraged insurers to accept such payments. The new rule certainly should not be interpreted, the official said, as requiring companies to reject such payments.
Still, advocacy groups expressed hope CMS will modify its rule.
“We don’t believe this CMS ruling was intentional but if the practice spreads, it threatens our nation’s most vulnerable patients who have costly, chronic conditions, like hemophilia,” said Kimberly Haugstad, executive director of the Hemophilia Federation of America. “We look to CMS to resolve the issue soon, so that patients in Louisiana can go back to receiving the assistance they need to access their life-saving treatments.”
Maginnis of Louisiana Blue Cross and Blue Shield said the insurer has “no problem” with non-profits sending money directly to the people they want to help pay for insurance.
But some representatives of advocacy groups for chronic disease patients say it is impractical to provide direct aid to patients because it would make the payments taxable — putting an additional strain on those with low incomes.