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khammond on DSKJM1Z7X2PROD with PROPOSALS2

Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Proposed Rules compliance deadline would only apply to the non-enforcement policy under which issuers would have flexibility to refrain from triggering grace periods or coverage terminations where a policy holder failed to pay the separate monthly bill, delaying when this enforcement posture would become available by 60 days to August 26, 2020.
On April 9, 2020, the United States District Court for the Eastern District of Washington issued an opinion declaring the separate billing regulation invalid in the State of Washington.84 The district court specifically found that the separate billing regulation was in conflict with Washingtons SingleInvoice Statute, 85 which requires health insurance issuers in the state to bill enrollees using a single invoice. The district court held that the separate billing regulation did not preempt Washingtons Single-Invoice Statute.
On July 10, 2020, the United States District Court for the District of Maryland found the separate billing regulation to be contrary to section 1554
of the ACA and arbitrary and capricious under the Administrative Procedure Act, thus declaring it invalid and unenforceable nationwide.86 The district court found the separate billing regulation to be in conflict with section 1554 of the ACA, which, among other key provisions, prohibits the Secretary from promulgating regulations that create any unreasonable barriers to obtaining appropriate medical care or impede timely access to health care services. The district court concluded that the policy imposed an unreasonable barrier because it would make it harder for enrollees to pay for insurance because they must keep track of two separate bills, which is likely to cause confusion and might lead to some enrollees losing health insurance. The district court also held the separate billing regulation to be arbitrary and capricious, finding that HHS failed to provide a reasoned explanation for abandoning the policy that existed prior to the adoption of the current separate billing regulation in the 2019 Program Integrity Rule. The district court also held that the implementation deadline was arbitrary and capricious because HHS failed to consider and adequately address specific, contrary evidence from regulated stakeholders that the implementation deadline for compliance with the separate billing 84 Washington v. Azar, 461 F. Supp. 3d 1016 E.D.
Wash. 2020.
85 Wash. Rev. Code 48.43.074.
86 Planned Parenthood of Maryland, Inc. v. Azar, No. CV CCB2000361 D. Md. July 10, 2020; 5
U.S.C. 706.

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regulation was unreasonable and would not provide QHP issuers with sufficient time to comply.
On July 20, 2020, the United States District Court for the Northern District of California issued an opinion 87
holding that the separate billing regulation was arbitrary and capricious, setting it aside nationwide. The district court held that the required mid-year implementation date for issuers to comply with the separate billing regulation would cause substantial transactional costs to states, issuers, and enrollees without any corresponding benefit. The court further found that the 2019 Program Integrity Rule lacked a reasoned explanation for deviating from the prior acceptable methods available to QHP issuers for compliance with the separate payment requirement and for departing from industry billing practice.
HHS initially appealed all three decisions, but those appeals have been placed on hold following the recent change in administration.
The district courts in Maryland and California vacated the 2019 Program Integrity Rules separate billing regulation in July 2020, in advance of the postponed compliance deadline of August 26, 2020. As such, the timing of the courts actions could have dissuaded issuers from assuming further costly administrative and operational burdens that would have been required to build the separate billing policy into their billing and IT systems. Further, as the courts nationwide invalidation of the policy prevented HHS from requiring initial implementation of the separate billing regulation, the potential consumer confusion over payment obligations, which could have inadvertently led to non-payment of enrollee premium and subsequent termination of consumer coverage, was also avoided. We believe it is prudent to reconsider the separate billing policy and its potential effects on consumer coverage.
In light of these developments, and upon consideration of court decisions invalidating the policy, we have reassessed the value of the separate billing policy and no longer believe it is justified in light of the high burden it would impose on issuers, states, Exchanges, and consumers, as well as the high likelihood of consumer confusion and unintended losses of coverage. Nor do we believe section 1303 of the ACA restricts issuers offering coverage of abortion services for which federal funds are prohibited to 87 California v. U.S. Dept of Health & Hum.
Servs., 473 F. Supp. 3d 992 N.D. Cal. July 20, 2020.

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collect the required separate payment through a separate bill and instruct consumers to pay for such bill in a separate transaction. Rather, section 1303 of the ACA outlines requirements that issuers of individual market QHPs covering such abortion services must follow to ensure that no public funding is utilized for coverage of such abortion services, including requiring issuers to collect separate payments for this portion of the premium, to segregate the funds, and deposit such funds into separate allocation accounts. As the 2019 Program Integrity Rule acknowledged, section 1303 of the ACA
does not specify the method a QHP
issuer must use to comply with the separate payment requirement.88
To address these concerns, we are proposing amendments to 156.280e2ii to revert to and codify the policy previously adopted in the 2016 Payment Notice such that QHP
issuers offering coverage of abortion services for which federal funds are prohibited may have flexibility in selecting a reasonable method to comply with the section 1303 separate payment requirement. If finalized, acceptable methods for satisfying the separate payment requirement would be outlined at 156.280e2ii and would include sending the policy holder a single monthly invoice or bill that separately itemizes the premium amount for coverage of such abortion services;
sending the policy holder a separate monthly bill for these services; or sending the policy holder a notice at or soon after the time of enrollment that the monthly invoice or bill will include a separate charge for such services and specify the charge.
We are also proposing a technical change to the section heading of 156.280 to more accurately reflect its contents if the revisions to rule text under 156.280 are finalized. We propose that it would instead read, Segregation of funds for abortion services. We seek comment on these proposals.
Under the proposed amendments to the regulatory text at 156.280e2ii, issuers would no longer be required to send separate paper bills or separate electronic communications. Nor would an issuer electing to send separate bills, or utilizing any of the proposed acceptable methods for collecting the separate payment, be required to instruct consumers to pay for the portion of their premium attributable to coverage of abortion services for which federal funds are prohibited in a 88 84

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