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HHS: Qualified Health Plans are Not “Federal Health Care Programs”

Ronald L. Wisor, Jr.

Ronald L. Wisor, Jr.,

Washington, D.C.

Beth Halpern

Tom Bulleit

Sheree R. Kanner

Isabel Dunst

Helen Trilling

30 October 2013
In a letter to Rep. Jim McDermott, Health and Human Services (HHS) Secretary Kathleen Sebelius answered a question frequently asked by healthcare providers and pharmaceutical and device manufacturers in the roll-up to implementation of the Affordable Care Act: “Are the qualified health plans (QHPs) established through the Act ‘federal health care programs’ under section 1128B of the Social Security Act?” This statute’s definition of “federal health care program” is used to define permissible and impermissible financial relationships in the Anti-Kickback Statute (42 USC 1320a-7b(b)). The question is important because the federal Anti-Kickback Statute is applicable only to financial arrangements involving products or services reimbursed  by a “federal health care program.” Sec. Sebelius states,
HHS: Qualified Health Plans are Not “Federal Health Care Programs”

The Department of Health and Human Services does not consider QHPs, other programs related to the Federally-facilitated Marketplace, and other programs under Title I of the Affordable Care Act to be federal health care programs.  This includes the State-based and Federally-facilitated Marketplaces; the cost-sharing reductions and advance payments of the premium tax credit; Navigators for the Federally-facilitated Marketplaces and other federally funded consumer assistance programs; consumer-oriented and operated health insurance plans; and the risk adjustment, reinsurance, and risk corridor programs.

Among other things, this clarification seemingly clears the way for pharmaceutical manufacturers to make copay coupons available to patients who purchase insurance through the Marketplaces, as well as for other forms of patient assistance and support that would be problematic if QHPs were considered federal health care programs.

The letter also explains that HHS is taking measures to “protect consumers and ensure robust oversight of these critical Affordable Care Act programs” through other provisions in the law and regulations issued by the department. HHS also will continue to work closely with the Office of the Inspector General, the Department of Justice, the Federal Trade Commission, and state departments of insurance to exercise these authorities effectively and coordinate oversight of ACA programs.

Ronald L. Wisor, Jr.

Ronald L. Wisor, Jr.,

Washington, D.C.

Beth Halpern

Tom Bulleit

Sheree R. Kanner

Isabel Dunst

Helen Trilling

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