By: HUB’s EB Compliance Team

The Departments of Labor, Health and Human Services, and Treasury (the “Departments”) have issued another set of FAQs (Part 64) addressing required coverage of contraceptive drugs. The FAQs were issued in response to reports of unreasonable medical management techniques and other problematic practices that create barriers to access of contraceptive benefits.

Background

The Affordable Care Act (“ACA”) requires non-grandfathered group health plans and insurers to cover, without cost-sharing, (1) at least one form of contraception in each FDA-identified contraceptive category, and (2) any contraceptive service or FDA-approved, cleared, or granted contraceptive product that an individual and their health care provider determine to be medically appropriate.

However, plans and insurers may utilize reasonable medical management techniques within a specified category of contraception to establish coverage criteria if the applicable guidelines issued by the Health Resources and Services Administration (“HRSA”) do not specify the frequency, method, treatment, or setting for the provision of the contraceptive service or product. For medical management criteria to be considered reasonable, there must be an “easily accessible, transparent, and sufficiently expedient” exception process that is not unduly burdensome and defers to the attending provider’s recommendation.

What’s Reasonable?

The Departments have identified the following practices that they believe are unreasonable:

  • Requiring individuals to satisfy step therapy protocols (a medical management technique also known as “fail first”) necessitating that they try numerous other services or products within the same category before the plan or issuer will approve coverage for the contraceptive service or product that is medically necessary for the individual, as determined by the individual’s health care provider;
  • Applying age-related restrictions for a contraceptive service or product that is medically necessary for the individual, as determined by the individual’s health care provider;
  • Imposing unduly burdensome administrative requirements as part of an exceptions process, such as onerous documentation requirements or multiple levels of processes (such as one to cover an excluded drug that is medically necessary and another to remove cost-sharing requirements), that result in denials of coverage or imposition of a cost-sharing requirement for contraceptive services or products that are medically necessary for the individual, as determined by the individual’s health care provider; and
  • Requiring cost sharing for services provided that are integral to the preventive service provided (regardless of whether the items and services are billed separately), such as anesthesia, pregnancy tests needed before the provision of certain forms of contraceptives, or other pre- and post-operative items and services integral to the furnishing of sterilization surgeries including tubal ligation.

The FAQs

The FAQs respond to these reported challenges by reiterating the Departments’ existing guidance and describing an alternative “therapeutic equivalence approach” for drugs and drug-led devices. (Drug-led devices are combination products that include both a drug and a device, but where the drug provides the primary effect.) A drug or drug-led device will be considered therapeutically equivalent based on the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book), but is generally a drug with the same active ingredient (think generics v. brand name drugs, although that is not true in every case).

For FDA-approved contraceptive drugs and drug-led devices, the Departments say a medical management technique will be considered reasonable if the plan or insurer covers all FDA-approved contraceptive drugs and drug-led devices in a category established by the HRSA without cost-sharing. However, if there are multiple therapeutic equivalent drug or drug-led devices in a category, the insurer or plan may cover one without cost-sharing. It can apply cost-sharing to the others as long as there is an exceptions process that allows an individual to access a specific therapeutic equivalent that is determined to be medically necessary with respect to the individual, as determined by the individual’s provider. Given that the drugs involved contain the same active compound, the Departments note that the use of an exceptions process should be less frequent for this therapeutic equivalent approach.

Takeaways

While the responsibility for understanding and implementing the details of a therapeutic equivalence approach rests largely with insurers and TPAs, employers should be aware of these rules. The guidance directs participants with complaints to contact the Department of Labor, their state Department of Insurance, or the Department of Health and Human Services as applicable. As a plan sponsor, if an employer hears complaints about difficulty accessing contraceptive coverage, a general understanding of these obligations can help the employer have a meaningful conversation with their carrier or TPA about how to make sure access is being provided.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only, and is not intended to constitute legal or tax advice as to an organization’s or individual's specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your or your organization’s particular needs.