PCIP Program changes payout rules

PCIP Program CMS DIrector

According to information released recently, The PCIP program. A program that was established to help cover Pre-Existing Conditions managed by the U.S. Department of Health and Human Services (HHS) stated they will set most reimbursement levels at just 100 percent of the Medicare reimbursement rates.

Clicking this link, will provide you a copy of the new interim final rule .

This rule appears in the Federal Register May 22. In situations in which federal PCIP managers cannot use Medicare provider reimbursement rates to set rates, PCIP managers will pay either 50 percent of billed charges or an amount set using a “relative value scale pricing methodology,”  The new payment rules established does not apply to prescription drugs, organ transplants, dialysis services or durable medical equipment. Additionally the new changes will prohibit providers from “balance billing,” or billing patients for the difference between the amount PCIP will pay and the amount the provider wants to collect.

This rule is set to take effect June 15,and comments will be due 60 days after the Federal Register publication date. Please read below for how to provide your comments.

The PCIP program was established as temporary bridge to the guaranteed coverage provision that goes into effect on January 1, 2014. The PCIP program was designed to provide coverage to eligible individuals who were denied coverage under a QHP due to their health status. Enrollment in the program began on July 2010 and started with a budget of 5 Billion dollars. Up until February 2013 when registration of new applicants was suspended the PCIP program enrolled more than 135,000 individuals with pre-existing conditions. Conditions that would have prevented them from obtaining health coverage under a standard health plan.

These enrollees in the PCIP program were individuals often with serious health conditions that require immediate and ongoing medical treatment including severe or life threatening conditions such as cancer. According to the letter, The combined effects of the number of individuals enrolled in the program,  utilization of services covered by the program, and the maximum out of pocket limit of enrollees ($6,250 in 2013) has resulted in a situation where the cost to carry the program to the end of 2013 is much higher than projected based on the current enrollment projections and claim rates. CMS concludes the program will exceed the amount of funds remaining. Hence the reason this policy changes is being implemented.

As you remember, I wrote a couple of months back about the PCIP program being suspended for any new registration or enrollees. This rule was established on February 16, 2013 and became effective in the state based PCIP program on March 02,2013. This was to help ensure that funds would be available through the 2013 year before the Health Insurance market place opened and its health plans becomes effective on January 1, 2014. This change is another change to help ensure the integrity of the program financing to help support the individuals who are currently enrolled make it thorough January 1, 2014

Starting in 2014, the Affordable Care Act guarantees that all Americans – regardless of their health status or pre-existing conditions will have access to a Qualifying Health Plan. This is a result of the guaranteed coverage provision that is part of the Affordable Care Act.

If you are interested in providing comment or feedback regarding the new PCIP update below is a list of how. You may submit comments in one of four ways (please choose only one of the

ways listed).

 1. Electronically. You may submit electronic comments on this regulation to

http://www.regulations.gov. Follow the instructions under the “More Search Options” tab.


2) . By regular mail. You may mail written comments to the following address


Centers for Medicare & Medicaid Services,

Department of Health and Human Services,

Attention: CMS-9995-IFC3,

P.O. Box 8010,

Baltimore, MD 21244-8010

Please allow sufficient time for mailed comments to be received before the close

of the comment period.

3) By express or overnight mail. You may send written comments to the

Following address ONLY:

Centers for Medicare & Medicaid Services,

Department of Health and Human Services,

Attention: CMS-9995-IFC3,

Mail Stop C4-26-05,

7500 Security Boulevard,

Baltimore, MD 21244-1850.

4) By hand or courier. If you prefer, you may deliver (by hand or courier) your

Written comments before the close of the comment period to either of the following addresses: a. For delivery in Washington, DC– Centers for Medicare & Medicaid Services,

Department of Health and Human Services,

Room 445-G, Hubert H. Humphrey Building,

200 Independence Avenue, SW.,

Washington, DC 20201

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