New Contraception Guidance Reminds TPAs of Obligations – and May Expand Them, Too

New Contraception Guidance Reminds TPAs of Obligations – and May Expand Them, Too

As most third party administrators (“TPAs”) know, the Affordable Care Act (“ACA”) imposes additional preventive care requirements on “non-grandfathered” health plans. One of those preventive care benefits relates to contraceptives.

Over the years there has been some uncertainty about which contraceptives, specifically, must be covered under the ACA. Prior IRS / DOL / HHS guidance provided helpful clarifications about the scope of this requirement. See, for example, these FAQs from January 2022: https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-51.pdf.

New Guidance “Strongly Encourages” TPAs to Do More. On June 27, 2022, the agencies issued an additional clarification – but one which strongly suggests that more is now required than prior guidance mandated. The new letter (available here: https://www.cms.gov/files/document/letter-plans-and-issuers-access-contraceptive-coverage.pdf) reiterates that a plan may use reasonable medical management techniques (e.g., a limit on the number of preventive care benefits), unless federal guidance provides otherwise. This was the position in final regulations from 2013.

Frequently Asked Questions (“FAQs”) from 2015 imposed some limits on the techniques that plans and TPAs could use. The FAQs stated that if a plan was using such a medical management technique, the process must be “easily accessible, transparent, and sufficiently expedient” so that it is not unduly burdensome. The TPA needed to process a review relating to what contraceptives a plan enrollee could receive in the “timeframe and manner that takes into account the nature of the claim (e.g., pre-service or post-service) and the medical exigencies involved for a claim involving urgent care.”

These references to ERISA’s claims and appeal procedures strongly suggested that a TPA could process the request for contraceptive coverage by simply following its typical, ERISA-mandated claims and appeal procedures. However, the June 2022 letter “strongly encourages” plans and TPAs to NOT follow their typical process for claims and appeals. Rather, the letter says just the opposite – plans and TPAs should “not requir[e] individuals to appeal an adverse benefit determination for a contraceptive using the plan’s or issuer’s internal claims and appeals process as the means to obtain an exception”.

Instead, the letter strongly encourages plans and TPAs to create a brand-new process. The agencies suggest that plans and TPAs create a “standard form and instructions” for plan enrollees to seek an exception to the TPA’s medical management techniques. The agencies suggest that plans and TPAs use the Medicare Coverage Determination Request Form as a possible template for this alternative process. That form is available here: https://www.cms.gov/Medicare/Appeals-and-Grievances/MedPrescriptDrugApplGriev/CoverageDeterminations-. It is not clear whether many TPAs have such a process in place right now, given that the prior FAQs did not require – or strongly encourage – such a process.

The agencies also stated – apparently for the first time – that any such new process or new form must be included in “plan documentation and online resources”. This would presumably include a summary plan description (“SPD”). Thus, if TPAs implement such a process for a client, they should make sure that the client includes that process in its SPD and other online resources (perhaps an intranet site which has the SPD).

Summary. The new letter falls into one of the “gray areas” that sometimes happen. The federal agencies did not specifically mandate the new process, but they did “strongly encourage” it. This suggests that it is perhaps a “soft mandate”. That is, the agencies may be looking specifically for plans and TPAs to have it in place. If they do, the agencies will likely find that the process is acceptable. If they do not, it seems like the agencies may find a violation, even if the plan and TPA could argue that the new process was not technically required. Thus, TPAs should consider implementing this process, even if they have an argument that it is not technically mandated.