December 9, 2011

Coverage of Preventive Services

Interim Final Rule
Summary

Score: 25 / 60

Additional details
Agency
HHS, DOL and Treasury
Regulatory Identification Number
0938-AQ07
Rule Publication Date
07/19/2010

RULE SUMMARY

This document contains interim final regulations implementing the rules for group health plans and health insurance coverage in the group and individual markets under provisions of the Patient Protection and Affordable Care Act regarding preventive health services.

METHODOLOGY

There are twelve criteria within our evaluation within three broad categories: Openness, Analysis and Use. For each criterion, the evaluators assign a score ranging from 0 (no useful content) to 5 (comprehensive analysis with potential best practices). Thus, each analysis has the opportunity to earn between 0 and 60 points.

Criterion Score

Openness

1. How easily were the RIA , the proposed rule, and any supplementary materials found online?
The NPRM is available on regulations.gov via a keyword or RIN search. The RIA is in the NPRM. There is no obvious path of links from the HHS home page to the regulation, but a keyword search leads to an html copy of the regulation via a set of FAQs. Thus, it is findable on the HHS web page but a bit awkward.
4/5
2. How verifiable are the data used in the analysis?
Most data were sourced but not linked and some were sourced to other rules or not publicly available documents. Estimates of the number of grandfathered plans relinquishing grandfathered status, and people affected, are sourced to an RIA for another regulation with just a brief explanation. Data on current coverage of preventive care are sourced to surveys with links. Other data, such as health care expenditures, are sourced to official government statistics, with a link.
4/5
3. How verifiable are the models and assumptions used in the analysis?
Citations provided for some assumptions (such as people not getting preventive treatment because of cost). A model used to estimate effects of the regulation on premiums and use of preventive service is described and results of calculations are mentioned, but not enough information is given for the reader to replicate or verify the model. Evidence that the regulation could produce benefits is sourced from a mix of peer-reviewed, government, think tank, and advocacy group studies. Most sources are linked where possible. Several "illustrative calculations" are based on "reasonable assumptions" that seem to have been pulled from thin air.
3/5
4. Was the analysis comprehensible to an informed layperson?
The analysis is fairly readable. It is hard to find the "bottom line" because the analysis presents some relevant evidence but does not really work it up into an estimate of the regulation's effects. Desperately needs some tables to show summary results.
2/5

Analysis

5. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them?
4/5
Does the analysis clearly identify ultimate outcomes that affect citizens’ quality of life?
Reduction of illnesses, morbidity, and mortality; increased productivity due to fewer sick days; lower health care costs; more equitable distribution of costs.
5/5
Does the analysis identify how these outcomes are to be measured?
All benefits are expressed in qualitative terms only, but the first three should be readily measurable. "Equity" could in principle be measurable if the departments offered a definition, but equity is not explicitly defined. A model calculates how utilization of preventive services might increase, but no evidence is presented showing that the regulation would cause the estimated increase. The result is not used to estimate changes in health outcomes. An illustrative calculation is presented for the possible effect on obesity. So, the RIA identified measures for some outcomes.
3/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
Mandating preventive care and prohibiting cost-sharing will increase use of preventive care, and greater use of preventive care will produce the benefits outlined above for people in plans that are not grandfathered.
4/5
Does the analysis present credible empirical support for the theory?
Departments cite evidence that poor Massachusetts residents increased their consumption of health care services when copay was reduced to zero, and other studies indicate that increasing preventive care has some benefits. NPRM notes that the required preventive services are "evidence-informed" recommendations from a task force, an advisory committee, and the Health Resources and Services Administration.
4/5
Does the analysis adequately assess uncertainty about the outcomes?
RIA cites research suggesting that effects will be different in different markets and for different size plans. Key uncertainties include the percentage of plans that already cover preventive care, state laws that mandate certain preventive coverages, and the number of plans that will relinquish grandfathered status. Some ranges of estimates are presented for these uncertainties, but since no outcomes of the regulation are quantified, they are not carried through to see how they might ultimately affect the size of the regulation's benefits.
2/5
6. How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve?
3/5
Does the analysis identify a market failure or other systemic problem?
RIA states that preventive services are underutilized because (1) turnover prevents health plans from benefiting from cost reductions in the future, (2) individuals must pay now but receive savings later, and (3) some preventive care involves spillover benefits for society as a whole. All three are characterized as "market failures."
5/5
Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal?
Theories above are testable, but need to be spelled out in greater detail to be logically coherent. The departments need to make an asymmetric information argument to explain why frequent switching of insurance would lead individuals to not internalize the health benefits of preventative care. The departments also need to explain why individuals should be expected to excessively discount future health costs.
3/5
Does the analysis present credible empirical support for the theory?
RIA cites evidence that people use more preventive services when the cost is lower. But nowhere does it define the "optimal" usage or show whether current usage is above or below this level. The size or relative importance of the three "market failures" is not estimated.
2/5
Does the analysis adequately assess uncertainty about the existence or size of the problem?
See answer to 5E above. Uncertainty about the number of plans and people affected could be interpreted as uncertainty about the size of the problem.
2/5
7. How well does the analysis assess the effectiveness of alternative approaches?
2/5
Does the analysis enumerate other alternatives to address the problem?
Several alternative tweaks are mentioned, relating to cost sharing of charges for office visits and whether to prohibit cost sharing for preventive services from out-of-network providers. Alternatives that would restrict copayments for any visit involving preventive care are acknowledged to be infeasible.
3/5
Is the range of alternatives considered narrow (e.g., some exemptions to a regulation) or broad (e.g., performance-based regulation vs. command and control, market mechanisms, nonbinding guidance, information disclosure, addressing any government failures that caused the original problem)?
These are relatively small variations on the same basic approach. Copayment alternatives were mentioned but not really seriously considered.
1/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved?
The analysis offers a few "illustrative calculations" but no firm estimates of the effects of the proposed regulation on the four proffered benefits. It offers only a cursory discussion of some effects of the alternatives.
1/5
Does the analysis adequately address the baseline? That is, what the state of the world is likely to be in the absence of federal intervention not just now but in the future?
The RIA documents numerous uncertainties about the baseline as reasons that the effects of the regulation cannot accurately be quantified. But it is not clear what the baseline is.
1/5
8. How well does the analysis assess costs and benefits?
2/5
Does the analysis identify and quantify incremental costs of all alternatives considered?
Analysis does not estimate total cost of the proposed regulation. It does estimate the average premium increase for someone on a typical health plan. It does not assess costs of alternatives.
2/5
Does the analysis identify all expenditures likely to arise as a result of the regulation?
It provides an example of the average premium increase for a person on a typical health plan. No estimate of any other expenditures and no total.
2/5
Does the analysis identify how the regulation would likely affect the prices of goods and services?
Explicitly assumes the cost increases will be passed through to consumers as higher premiums. Estimates the regulation will, on average, increase premiums for non-grandfathered plans by 1.5 percent. The "model" used in this calculation is not clearly explained or documented.
3/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation?
A model calculates the increase in utilization and resulting premium increases required to cover this cost. Since the regulation does not apply to grandfathered plans, it creates obvious incentives for plan sponsors, insurers, and perhaps even patients to stay with grandfathered plans, but this is not examined. No discussion of whether higher premiums would prompt some individuals or firms to drop or alter coverage.
1/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis?
Numerous uncertainties acknowledged. The departments performed a sensitivity analysis, which varied the cost of benefits per person and the size of the assumed behavioral change. RIA reports that the effect on premiums is "a few tenths of a percent" lower or higher. The entire sensitivity analysis is described in three paragraphs.
2/5
Does the analysis identify the alternative that maximizes net benefits?
Neither benefits nor net benefits were calculated.
0/5
Does the analysis identify the cost-effectiveness of each alternative considered?
Since neither benefits nor costs were calculated, cost-effectiveness could not be calculated.
0/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs?
Analysis assumes that all cost increases will be passed through as higher premiums, acknowledging that this may not always occur. Qualitatively discusses how the regulation would shift costs, with different net impacts on different kinds of patients. Agencies declined to do a small business analysis because this is an interim final rule.
2/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
A brief statement notes that those most likely to benefit are those whose plans currently have no or limited preventive care coverage or have high cost-sharing for such care. No calculations of benefit incidence provided.
2/5

Use

9. Does the proposed rule or the RIA present evidence that the agency used the analysis?
Regulation requiring coverage of preventive care was required by legislation. List of services was not determined by the results of this RIA. NPRM says agencies issued interim final rules so that plans and patients would know the rules before the Sept. 23, 2010 legislative deadline for the rules to take effect. RIA appears to be written after decisions were made, to support the claim that mandating preventive services will produce benefits and provide some illustrative calculations about possible effects on premiums.
1/5
10. Did the agency maximize net benefits or explain why it chose another alternative?
Net benefits were not calculated, so the departments were unaware of net benefits.
0/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future?
No goals or measures established. Literature cited in the RIA could be used as a starting point to develop goals and measures. This would require a great deal of additional work since the RIA does not make the connection between this literature and clear estimates of the regulation's likely effects.
0/5
12. Did the agency indicate what data it will use to assess the regulation's performance in the future and establish provisions for doing so?
The RIA cites studies showing that preventive care improves health outcomes, so some data exist somewhere that could be used to estimate the effects of the regulation after it is implemented. But that's not the same as HHS tracking the data for evaluation purposes.
0/5
 
Total 25 / 60