Tucked away in section 1302 of the behemoth Patient Protection and Affordable Care Act (ACA) is the requirement that the Department of Health and Human Services define the essential healthcare benefits that must be offered – beginning in 2014 – by health insurance exchanges and health insurance policies, both individual and small-group.
This work is fundamental to the future state of healthcare. It will directly affect the medical benefits of many Americans, and therefore the functioning of hospitals and healthcare systems.
The ACA specifies 10 broad categories of medical care for which essential benefits must be defined: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative and habilitative services and devices, lab services, preventive and wellness services and chronic disease management, and pediatric services, including oral and vision care.
The idea is that the essential services will reflect the benefits provided in a typical employer health insurance package. Medical care that isn’t deemed essential can be excluded from coverage.
A committee at the independent Institute of Medicine has been hard at work since January on the first step in the process of creating the list of services to be deemed essential benefits. On Friday the IOM will unveil the methods and criteria that HHS will then use to develop the actual list. “IOM provides the guidance and HHS will define the benefits,” explains IOM spokesperson Christine Stencel.
The IOM committee has hosted two public workshops and heard from hundreds of stakeholders, including employers, insurers, healthcare providers, consumers, and healthcare researchers. These groups and individuals hope that benefits affecting their part of the medical world will be included.
The IOM is tight-lipped about what its final report will say, so I turned to the Institute’s workshop report to glean information about the committee’s focus. I quickly found that the IOM has tackled a seemingly impossible task. In many cases, there is no clear path to an unquestionably right decision. The devil is indeed in the details.
Expect the IOM report to weigh in on several key areas:
Balancing coverage and affordability. As you can imagine, opinions on how to reconcile benefits and price run the gamut. What benefits make a health insurance policy meaningful? Does essential mean “basic” or should comprehensive coverage be included? The IOM will have to balance the desires of consumer groups for comprehensive coverage with concerns that small businesses will not be able to offer more expensive benefit packages for their employees.
Defining a typical employer plan. According to a Department of Labor survey that the IOM used to help it decide what constitutes a typical plan, 99% of health plan participants currently have inpatient coverage, 67% have hospice care, and the median deductible is $500 per person. Should essential coverage be consistent with the generous plans offered by large firms or match the benefit packages of smaller companies – because they will be most affected by the ACA?
Defining medical necessity of care. Medical necessity can mean a lot of things: Is it the care provided in accordance with generally accepted standards? Is it evidenced-based intervention? Is a certain medical intervention appropriate for a specific patient? How should medical necessity be applied to chronic diseases? In addition to care for healthy adults, the IOM must consider the definition of medical necessity for care to children, the elderly, and the chronically ill.
Applying evidence to benefit coverage. Stakeholder comments to the IOM committee were united in support of using medical evidence to decide what benefits should be covered in an essential healthcare package. But what evidence should be standardized? Should there be flexibility so as not to limit access to care? How should evidence be used to assess new technologies? Age and chronic illnesses also come into play. The IOM has it hands full here.
I asked a few stakeholder groups what they would like to see from the IOM’s review.
Ethan Rome, executive director of Health Care for America Now, a grassroots group affiliated with the Obama administration’s healthcare reform efforts, says a specific list of essential medical benefits would be a bad idea. “The final rules must ensure that consumers get good benefits, not mini-med plans that burden families and businesses with outrageous medical costs and force them into bankruptcy,” he told HealthLeaders Media.
Dave Lemmon, director of communications for Families USA, a nonprofit advocating for consumers, says the organization would like an essential benefits package to “recognize the importance of coverage for disease management services that can help people stay healthy, save money, and avoid more expensive interventions.”
And Robert Zirkelbach, press secretary for America's Health Insurance Plans, the trade association for the health insurance industry, says his organization would like to see coverage remain affordable, and that “when you add benefits, the health insurance will cost more.” AHIP also recommends that any definition of essential benefits embrace the federal employee’s health plan model, which provides a variety of cost-sharing levels so consumers can pay for what they want.
The IOM report will help (I hope) define and narrow some of the broad issues that must be considered. When the report is released, the IOM’s work will be done but the debate will just be starting.
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
