1. Short title
This Act may be cited as the “Insurance Fairness for Amputees Act”.
Insurance Fairness for Amputees Act
A BILL
To amend the Employee Retirement Income Security Act of 1974, the Public Health Service Act, and the Internal Revenue Code of 1986 to provide parity under group and individual health plans and group and individual health insurance coverage for the provision of benefits for prosthetics and custom orthotics and benefits for other medical and surgical services.
2. Findings and purpose
Findings— Congress makes the following findings:
There are more than 1,700,000 people in the United States living with limb loss, many of whom are appropriate candidates for prosthetic care. A comparable number experience trauma, illness, or disability that results in musculoskeletal or neuromuscular impairment of the limbs, back, and neck requiring the use of orthotic care.
Every year, there are more than 130,000 people in the United States who undergo amputation procedures.
In addition, United States military personnel serving in Iraq and Afghanistan and around the world have sustained traumatic injuries resulting in amputation and musculoskeletal or neuromuscular injury.
The number of amputations in the United States is projected to increase in the years ahead due to the rising incidence of diabetes and other chronic illness.
Those experiencing limb loss and limb dysfunction can and want to regain their lives as productive members of society, and prosthetic and orthotic care often enables amputees and others with orthopedic impairments to continue working and living productive lives.
Insurance companies often restrict coverage for prosthetic and orthotic devices and related services over an individual’s lifetime, which shifts costs onto individuals and consequently to the Medicare and Medicaid programs.
Twenty States have addressed this problem and have prosthetic or orthotic parity legislation, which also is being considered actively in other States.
The States in which prosthetic or orthotic fairness in coverage laws have been enacted have found there to be minimal or no increases in insurance premiums and have reduced Medicare and Medicaid costs.
Coverage of orthotic and prosthetic devices and related services is only appropriate for individuals missing a limb or having an orthopedic condition in need of treatment. Therefore, a fixed population of individuals are candidates for these devices and related services.
Appropriate and timely treatment involving prosthetic and orthotic devices and related services allow people to regain health function, preexisting work, and independent living.
Prosthetic and orthotic devices and related services are a distinct and separate benefit from the durable medical equipment benefit, but this distinction often is not recognized as insurers typically combine these benefits under a combined limit.
The Patient Protection and Affordable Care Act (Public Law 111–148) and the Health Care and Education Reconciliation Act (Public Law 111–152), include rehabilitative and habilitative services as an essential health benefit, which legislative history shows is intended to cover prosthetic and orthotic devices and related services.
The Institute of Medicine concluded that prosthetic and orthotic devices and related services are covered under a typical employer plan.
However, while lifetime and annual dollar limitations on essential health benefits are prohibited under the Patient Protection and Affordable Care Act (Public Law 111–148) and the Health Care and Education Reconciliation Act (Public Law 111–152), other techniques to minimize or eliminate coverage continue to be used across the country and are denying individuals access to medically necessary prosthetic and orthotic devices and related services.
Purpose— It is the purpose of this Act to require that each group and individual health plan and individual and group health insurance coverage that provides medical and surgical benefits and also provides coverage for prosthetics or custom orthotics (or both), provide such coverage under terms and conditions that are no less favorable than the terms and conditions under which medical and surgical benefits are provided under such plan.
3. Prosthetics and custom orthotics fairness in coverage
ERISA—
In general— Subpart B of part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185 et seq.) is amended by adding at the end the following:
“716. Prosthetics and custom orthotics fairness in coverage
“(a) In general—In the case of a group health plan (or health insurance coverage offered in connection with a group health plan) that provides medical and surgical benefits and also provides benefits for prosthetics or custom orthotics (as defined under paragraphs (1) and (2) of subsection (e)) (or both)—
“(1) such benefits for prosthetics or custom orthotics (or both) under the plan (or coverage) shall be provided under terms and conditions that are no less favorable than the terms and conditions applicable to substantially all medical and surgical benefits provided under the plan (or coverage);
“(2) such benefits for prosthetics or custom orthotics (or both) under the plan (or coverage) may not be subject to separate financial requirements (as defined in subsection (d)(3)) that are applicable only with respect to such benefits, and any financial requirements applicable to such benefits shall be no more restrictive than the financial requirements applicable to substantially all medical and surgical benefits provided under the plan (or coverage); and
“(3) any treatment limitations (as defined in subsection (d)(4)) applicable to such benefits for prosthetics or custom orthotics (or both) under the plan (or coverage) may not be more restrictive than the treatment limitations applicable to substantially all medical and surgical benefits provided under the plan (or coverage).
“(b) Patient access—A group health plan (or health insurance coverage offered in connection with a group health plan) described in subsection (a) that does not provide coverage for benefits outside of a network shall ensure that such provider network is adequate to ensure enrollee access to prosthetic and custom orthotic devices and related services provided by appropriately credentialed practitioners and accredited suppliers of prosthetics and custom orthotics.
“(c) Additional requirements
“(1) Prior authorization—In the case of a group health plan (or health insurance coverage offered in connection with a group health plan) that requires, as a condition of coverage or payment for prosthetics or custom orthotics (or both) under the plan (or coverage), prior authorization, such prior authorization must be required in the same manner as prior authorization is required by the plan (or coverage) as a condition of coverage or payment for all similar medical and surgical benefits provided under the plan (or coverage).
“(2) Limitation on benefits—Coverage for required benefits for prosthetics and custom orthotics under this section may be limited to coverage of the most appropriate device or component model that meets the medical requirements of the patient, as determined by the treating physician of the patient involved.
“(3) Coverage for repair or replacement—Benefits for prosthetics and custom orthotics required under this section shall include coverage for the repair or replacement of prosthetics and custom orthotics, if the repair or replacement is due to normal wear and tear, irreparable damage, a change in the condition of the patient as determined by the treating physician, or otherwise determined appropriate by the treating physician of the patient involved.
“(d) Definitions—In this section:
“(1) Prosthetics—The term prosthetics means those devices and components that may be used to replace, in whole or in part, an arm or leg, as well as the services required to do so and includes external breast prostheses incident to mastectomy resulting from breast cancer.
“(2) Custom orthotics—The term custom orthotics means the following:
“(A) Custom-fabricated orthotics and related services, which include custom-fabricated devices that are individually made for a specific patient, as well as all services and supplies that are medically necessary for the effective use of the orthotic device and instructing the patient in the use of the device. No other patient would be able to use this particular orthosis. A custom-fabricated orthosis is a device which is fabricated based on clinically derived and rectified castings, tracings, measurements, or other images (such as x-rays) of the body part. The fabrication may involve using calculations, templates and component parts. This process requires the use of basic materials and involves substantial work such as vacuum forming, cutting, bending, molding, sewing, drilling and finishing prior to fitting on the patient. Custom-fabricated devices may be furnished only by an appropriately credentialed (certified or licensed) practitioner and accredited supplier in Orthotics or Prosthetics. Such devices and related services are represented by the set of L-codes under the Healthcare Common Procedure Coding System describing this care listed on the date of enactment of this section in Centers for Medicare & Medicaid Services Transmittal 656.
“(B) Custom-fitted high orthotics and related services, which include prefabricated devices that are manufactured with no specific patient in mind, but that are appropriately sized, adapted, modified, and configured (with the required tools and equipment) to a specific patient in accordance with a prescription, and which no other patient would be able to use, as well as all services and supplies that are medically necessary for the effective use of the orthotic device and instructing the patient in the use of the device. Custom-fitted high devices may be furnished only by an appropriately credentialed (certified or licensed) practitioner and accredited supplier in Orthotics or Prosthetics. Such devices and related services are represented by the existing set of L-codes under the Healthcare Common Procedure Coding System describing this care listed on the date of enactment of this section in Centers for Medicare & Medicaid Services Transmittal 656.
“(3) Financial requirements—The term financial requirements includes deductibles, coinsurance, co-payments, other cost sharing, and limitations on the total amount that may be paid by a participant or beneficiary with respect to benefits under the plan or health insurance coverage.
“(4) Treatment limitations—The term treatment limitations includes limits on the frequency of treatment, number of visits, specific prescribed components, limits that are more broadly applicable to durable medical equipment, or other similar limits on the amount, duration, or scope of treatment.
“(e) Differentiation from Durable Medical Equipment—For purposes of this section, prosthetics and custom orthotics shall be treated as distinct from durable medical equipment.”
Clerical amendment— The table of contents in section 1 of the Employee Retirement Income Security Act of 1974 is amended by inserting after the item relating to section 714 the following:
PHSA—
In general— Title XXVII of the Public Health Service Act is amended by inserting after section 2728 of such Act (42 U.S.C. 300gg–28), as redesignated by section 1001(2) of the Patient Protection and Affordable Care Act (Public Law 111–148), the following:
“2729. Prosthetics and custom orthotics parity
“(a) In general—In the case of a group health plan, or a health insurance issuer offering group or individual health insurance coverage, that provides medical and surgical benefits and also provides benefits for prosthetics or custom orthotics (as defined under paragraphs (1) and (2) of subsection (e)) (or both)—
“(1) such benefits for prosthetics or custom orthotics (or both) under the plan or coverage shall be provided under terms and conditions that are no less favorable than the terms and conditions applicable to substantially all medical and surgical benefits provided under the plan or coverage;
“(2) such benefits for prosthetics or custom orthotics (or both) under the plan or coverage may not be subject to separate financial requirements (as defined in subsection (e)(2)) that are applicable only with respect to such benefits, and any financial requirements applicable to such benefits shall be no more restrictive than the financial requirements applicable to substantially all medical and surgical benefits provided under the plan or coverage; and
“(3) any treatment limitations (as defined in subsection (e)(3)) applicable to such benefits for prosthetics or custom orthotics (or both) under the plan or coverage may not be more restrictive than the treatment limitations applicable to substantially all medical and surgical benefits provided under the plan or coverage.
“(b) Patient access—A group health plan, or health insurance issuer offering group or individual health insurance coverage, described in subsection (a) that does not provide coverage for benefits outside of a network shall ensure that such provider network is adequate to ensure enrollee access to prosthetic and custom orthotic devices and related services provided by appropriately credentialed practitioners and accredited suppliers of prosthetics and custom orthotics.
“(c) Additional requirements
“(1) Prior authorization—In the case of a group health plan, or health insurance issuer offering group or individual health insurance coverage, that requires, as a condition of coverage or payment for prosthetics or custom orthotics (or both) under the plan or coverage, prior authorization, such prior authorization must be required in the same manner as prior authorization is required by the plan or coverage as a condition of coverage or payment for all similar medical and surgical benefits provided under the plan or coverage.
“(2) Limitation on benefits—Coverage for required benefits for prosthetics and custom orthotics under this section may be limited to coverage of the most appropriate device or component model that adequately meets the medical requirements of the patient, as determined by the treating physician of the patient involved.
“(3) Coverage for repair or replacement—Benefits for prosthetics and custom orthotics required under this section shall include coverage for the repair or replacement of prosthetics and custom orthotics, if the repair or replacement is due to normal wear and tear, irreparable damage, a change in the condition of the patient as determined by the treating physician, or otherwise determined appropriate by the treating physician of the patient involved.
“(d) Definitions—In this section:
“(1) Prosthetics—The term prosthetics means those devices and components that may be used to replace, in whole or in part, an arm or leg, as well as the services required to do so and includes external breast prostheses incident to mastectomy resulting from breast cancer.
“(2) Custom orthotics—The term custom orthotics means the following:
“(A) Custom-fabricated orthotics and related services, which include custom-fabricated devices that are individually made for a specific patient, as well as all services and supplies that are medically necessary for the effective use of the orthotic device and instructing the patient in the use of the device. No other patient would be able to use this particular orthosis. A custom-fabricated orthosis is a device which is fabricated based on clinically derived and rectified castings, tracings, measurements, or other images (such as x-rays) of the body part. The fabrication may involve using calculations, templates and component parts. This process requires the use of basic materials and involves substantial work such as vacuum forming, cutting, bending, molding, sewing, drilling and finishing prior to fitting on the patient. Custom-fabricated devices may be furnished only by an appropriately credentialed (certified or licensed) practitioner and accredited supplier in Orthotics or Prosthetics. Such devices and related services are represented by the set of L-codes under the Healthcare Common Procedure Coding System describing this care listed on the date of enactment of this section in Centers for Medicare & Medicaid Services Transmittal 656.
“(B) Custom-fitted high orthotics and related services, which include prefabricated devices that are manufactured with no specific patient in mind, but that are appropriately sized, adapted, modified, and configured (with the required tools and equipment) to a specific patient in accordance with a prescription, and which no other patient would be able to use, as well as all services and supplies that are medically necessary for the effective use of the orthotic device and instructing the patient in the use of the device. Custom-fitted high devices may be furnished only by an appropriately credentialed (certified or licensed) practitioner and accredited supplier in Orthotics or Prosthetics. Such devices and related services are represented by the existing set of L-codes under the Healthcare Common Procedure Coding System describing this care listed on the date of enactment of this section in Centers for Medicare & Medicaid Services Transmittal 656.
“(3) Financial requirements—The term financial requirements includes deductibles, coinsurance, co-payments, other cost sharing, and limitations on the total amount that may be paid by a participant or beneficiary with respect to benefits under the plan or health insurance coverage.
“(4) Treatment limitations—The term treatment limitations includes limits on the frequency of treatment, number of visits, specific prescribed components, and limits that are more broadly applicable to durable medical equipment, or other similar limits on the amount, duration, or scope of treatment.
“(e) Differentiation from Durable Medical Equipment—For purposes of this section, prosthetics and custom orthotics shall be treated as distinct from durable medical equipment.”
Application to individual health insurance coverage before 2014— For purposes of applying section 2729 of the Public Health Service Act, as inserted by paragraph (1), to individual health insurance coverage before 2014, the provisions of such section shall be treated as also included under part B of title XXVII of the Public Health Service Act.
Internal Revenue Code— Subchapter B of chapter 100 of subtitle K of the Internal Revenue Code of 1986 is amended by adding after section 9813 the following:
“9814. Prosthetics and custom orthotics fairness in coverage
“(a) In general—In the case of a group health plan (or health insurance coverage offered in connection with a group health plan) that provides medical and surgical benefits and also provides benefits for prosthetics or custom orthotics (as defined under paragraphs (1) and (2) of subsection (e)) (or both)—
“(1) such benefits for prosthetics or custom orthotics (or both) under the plan (or coverage) shall be provided under terms and conditions that are no less favorable than the terms and conditions applicable to substantially all medical and surgical benefits provided under the plan (or coverage);
“(2) such benefits for prosthetics or custom orthotics (or both) under the plan (or coverage) may not be subject to separate financial requirements (as defined in subsection (e)(2)) that are applicable only with respect to such benefits, and any financial requirements applicable to such benefits shall be no more restrictive than the financial requirements applicable to substantially all medical and surgical benefits provided under the plan (or coverage); and
“(3) any treatment limitations (as defined in subsection (e)(3)) applicable to such benefits for prosthetics or custom orthotics (or both) under the plan (or coverage) may not be more restrictive than the treatment limitations applicable to substantially all medical and surgical benefits provided under the plan (or coverage).
“(b) Patient access—A group health plan (or health insurance coverage offered in connection with a group health plan) described in subsection (a) that does not provide coverage for benefits outside of a network shall ensure that such provider network is adequate to ensure enrollee access to prosthetic and custom orthotic devices and related services provided by appropriately credentialed practitioners and accredited suppliers of prosthetics and custom orthotics.
“(c) Additional requirements
“(1) Prior authorization—In the case of a group health plan (or health insurance coverage offered in connection with a group health plan) that requires, as a condition of coverage or payment for prosthetics or custom orthotics (or both) under the plan (or coverage), prior authorization, such prior authorization must be required in the same manner as prior authorization is required by the plan (or coverage) as a condition of coverage or payment for all similar medical and surgical benefits provided under the plan (or coverage).
“(2) Limitation on benefits—Coverage for required benefits for prosthetics and custom orthotics under this section may be limited to coverage of the most appropriate device or component model that meets the medical requirements of the patient, as determined by the treating physician of the patient involved.
“(3) Coverage for repair or replacement—Benefits for prosthetics and custom orthotics required under this section shall include coverage for the repair or replacement of prosthetics and custom orthotics, if the repair or replacement is due to normal wear and tear, irreparable damage, a change in the condition of the patient as determined by the treating physician, or otherwise determined appropriate by the treating physician of the patient involved.
“(4) Assistance to enrollees—The Secretary of the Treasury, in consultation with the Secretary of Health and Human Services, shall provide assistance to enrollees under plans or coverage to which the amendment made by section 3 apply with any questions or problems with respect to compliance with the requirements of such amendment.
“(5) Audits—The Secretary of the Treasury, in consultation with the Secretary of Health and Human Services, shall provide for the conduct of random audits of group health plans (and health insurance coverage offered in connection with such plans) to ensure that such plans (or coverage) are in compliance with the amendments made by section (3).
“(d) Definitions—In this section:
“(1) Prosthetics—The term prosthetics means those devices and components that may be used to replace, in whole or in part, an arm or leg, as well as the services required to do so and includes external breast prostheses incident to mastectomy resulting from breast cancer.
“(2) Custom orthotics—The term custom orthotics means the following:
“(A) Custom-fabricated orthotics and related services, which include custom-fabricated devices that are individually made for a specific patient, as well as all services and supplies that are medically necessary for the effective use of the orthotic device and instructing the patient in the use of the device. No other patient would be able to use this particular orthosis. A custom-fabricated orthosis is a device which is fabricated based on clinically derived and rectified castings, tracings, measurements, or other images (such as x-rays) of the body part. The fabrication may involve using calculations, templates and component parts. This process requires the use of basic materials and involves substantial work such as vacuum forming, cutting, bending, molding, sewing, drilling and finishing prior to fitting on the patient. Custom-fabricated devices may be furnished only by an appropriately credentialed (certified or licensed) practitioner and accredited supplier in Orthotics or Prosthetics. Such devices and related services are represented by the set of L-codes under the Healthcare Common Procedure Coding System describing this care listed on the date of enactment of this section in Centers for Medicare & Medicaid Services Transmittal 656.
“(B) Custom-fitted high orthotics and related services, which include prefabricated devices that are manufactured with no specific patient in mind, but that are appropriately sized, adapted, modified, and configured (with the required tools and equipment) to a specific patient in accordance with a prescription, and which no other patient would be able to use, as well as all services and supplies that are medically necessary for the effective use of the orthotic device and instructing the patient in the use of the device. Custom-fitted high devices may be furnished only by an appropriately credentialed (certified or licensed) practitioner and accredited supplier in Orthotics or Prosthetics. Such devices and related services are represented by the existing set of L-codes under the Healthcare Common Procedure Coding System describing this care listed on the date of enactment of this section in Centers for Medicare & Medicaid Services Transmittal 656.
“(3) Financial requirements—The term financial requirements includes deductibles, coinsurance, co-payments, other cost sharing, and limitations on the total amount that may be paid by a participant or beneficiary with respect to benefits under the plan or health insurance coverage.
“(4) Treatment limitations—The term treatment limitations includes limits on the frequency of treatment, number of visits, specific prescribed components, or other similar limits on the scope or duration of treatment.
“(e) Differentiation from Durable Medical Equipment—For purposes of this section, prosthetics and custom orthotics shall be treated as distinct from durable medical equipment.”
Effective date— The amendments made by this section shall apply with respect to plan years beginning on or after the date of the enactment of this section and with respect to health insurance coverage issued on or after such date.
4. Updating standard definitions to include prosthetics and custom orthotics
In general— Section 2715(g)(3) of the Public Health Service Act (42 U.S.C. 300gg–15(g)(3)) is amended by inserting “prosthetics, custom orthotics,” after “emergency medical transportation,”.
Prosthetics; custom orthotics— In developing standards for the definitions of the terms prosthetics and custom orthotics pursuant to the amendment made by subsection (a), the Secretary shall ensure that such definitions are consistent with the definitions of such terms in section 2729(d) of the Public Health Service Act (as added by section 3(b) of this Act).
5. Federal administrative responsibilities
Assistance to enrollees— The Secretary of Labor, in consultation with the Secretary of Health and Human Services, shall provide assistance to enrollees under group health plans (and health insurance coverage offered in connection with such plans) to which the amendments made by section 3 apply with any questions or problems with respect to compliance with the requirements of such amendments.
Audits— The Secretary of Labor, in consultation with the Secretary of Health and Human Services, shall provide for the conduct of random audits of group health plans (and health insurance coverage offered in connection with such plans) to ensure that such plans (or coverage) are in compliance with the amendments made by section 3.
Regulations— Not later than 1 year after the date of the enactment of this Act, the Secretary of Labor, in consultation with the Secretary of Health and Human Services, shall promulgate final regulations to carry out this Act and the amendments made by this Act.
Definitions— In this section:
Group Health Plan— The term group health plan has the meaning given such term in section 733(a) of the Employee Retirement and Income Security Act of 1974 (29 U.S.C. 1191b(a)).
Health Insurance Coverage— The term health insurance coverage has the meaning given such term in section 733(b)(1) of such Act (29 U.S.C. 1191b(b)(1)).