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  • Essential Health Benefits Offered in Exchanges Must Balance Comprehensiveness With Cost, Says IOM

    Yesterday, the Institute of Medicine (IOM) Committee on Defining and Revising an Essential Health Benefits (EHB) Package released its report and recommendations to the secretary of the Department of Health and Human Services on defining the essential health benefits. Under the Affordable Care Act (ACA), IOM was tasked with providing this guidance. The committee emphasized that defining the EHB "will be balancing the comprehensiveness of benefits with their cost."

    The IOM committee recommended that modifications to small employer benefit packages currently available are to consider the 10 general categories of benefits required under the ACA, which includes habilitative and rehabilitative services; apply IOM committee-developed criteria to guide EHB content and on EHB determination methods; and develop an initial package within a premium target, which is a way to address the affordability issue.

    IOM emphasized that if cost is disregarded, the EHB package will be too expensive and will defeat the purpose of ACA. The committee's recommendation is to tie the EHB package to the average payment small employers would have paid for their current benefits packages in 2014. ACA will apply to insurance purchases both in and out of Exchanges during the first year. The "premium target" should be revised annually, with significant stakeholder involvement taking medical inflation into account.

    Other recommendations include:

    • Medical necessity determinations are both appropriate and necessary. IOM supports transparency in rule establishment of making these determinations as well as in the application and appeals processes.
    • IOM supports the Stanford definition of medically necessary, which includes health interventions used to maintain and restore functional ability.
    • Concepts of value, individualized care, and medical necessity decision-making should be rooted in evidence. Flexibility in the application of this standard is essential to prevent outcomes which are potentially discriminatory. Further, cases should be assessed on an individual basis.
    • Establishment of a National Benefits Advisory Council (NBAC) to advise HHS on updating the EHB; NBAC should also conduct ongoing evaluations of appeals to determine if more specific guidance is required on particular services.
    • Establish a structured public deliberative processes to identify the values and priorities of individuals eligible to purchase insurance through the exchanges, and include the general public.
    • HHS secretary should develop a process that facilitates discovery and implementation of innovative practices through feedback and successes from states in the operation of the Exchanges.
    • Health services should be "medically effective and supported by a sufficient evidence base, or in the absence of evidence on ef­fectiveness, a credible standard of care is used."

    The IOM committee considered various methods of defining EHBs, which included by provider, by specific services, and physicians by medical necessity determination. It noted that defining medical services as those delivered only by nurses and physician assistants is more restrictive than most employer policies and that other types of health professionals—physical therapists being specifically mentioned—are included in most employer policies. The committee elaborated that in some states and other countries, supplemental policies must be purchased for services, such as physical therapy. IOM cited research from the British Columbia Ministry of Health regarding the purchase a supplemental policy to access physical therapy services. ACA prohibits insurers from discriminating on the basis of type of provider as long as the provider is operating within its scope of practice.

    APTA will post a summary of the report on its Web site in the near future.

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