IOM’s Guidance on the Essential Benefits Package Released
The Institute of Medicine (IOM) released a 297-page report recently that lists criteria and methodology that should be used in establishing the Essential Benefits Package, a term coined in the federal healthcare reform law, The Affordable Care Act. The Essential Benefits package will be required for all plans offered through the Exchanges in the individual and small group markets, and a benchmark that will likely permeate the insurance industry for other types of policyholders, such as employer groups. Insurance carriers, medical professionals and other interest groups have been waiting anxiously to see what medical services will be included in the Essential Benefits Package, but we might have to wait a little longer.
The report released today falls short of an actual definition of the Essential Benefits Package, leaving HHS to decide specific criteria said to be released sometime in 2012. The Institute of Medicine is an 18-person federal advisory panel that was commissioned to assist the Department of Health and Human Services in defining the Essential Benefits package.
In the report, the advisory panel pays careful attention to affordability. The committee reported, “Because the package must be affordable to the small firms and individuals who will be the principal customers for the exchanges, its comprehensiveness should be balanced with its potential cost.” The level of fiscal conservatism and practicality shown in the report was lauded by Karen Ignagni, president of America’s Health Insurance Plan, who said, “We agree that this balance is critical to ensuring that individuals, working families and small employers can afford health insurance.”
The report is said to encourage a focus on benefits that are medical, not educational or social in nature which some fear may leave the door open to interpretation resulting in claim denials. For example, some insurers limit certain types of autism treatment because they have deemed them educational in nature rather than medical.
The report laid out broad goals:
“The (package) must be affordable, maximize the number of people with insurance, protect the most vulnerable individuals, promote better care, ensure stewardship of limited financial resources by focusing on high value services of proven effectiveness, promote shared responsibility for improving our health, and address the medical concerns of greatest importance to us all”.
When deciding on benefits, the panel said, HHS should take into account whether they would result in “meaningful improvement in outcomes” and are “supported by a sufficient evidence base.”
The panel said the federal government should allow states that administer their own exchanges to make changes to the list of essential benefits as long as those variations are consistent with the health law and are as comprehensive as the required benefits list.
The rules will apply to all policies offered to individuals and small businesses on the health exchanges created under the 2010 Affordable Care Act. About 26 million Americans will get coverage through the new exchanges by 2016, according to the Congressional Budget Office.
HHS Secretary Kathleen Sebelius said she would review the panel’s report and hold a series of “listening sessions” across the country to get public comment. Once the HHS releases the actual definition of the Essential Benefits package, a comment period will be offered on that as well.
Click here to see the full text of the Institute of Medicine’s report published on the IOM’s website at http://iom.edu/Reports/2011/Essential-Health-Benefits-Balancing-Coverage-and-Cost.aspx.