Affordable Care Act (ACA)


Initial provisions of the Affordable Care Act (ACA) were implemented in March 2010. Additional provisions, including the individual mandate for most people to purchase health coverage (by March 31, 2014), will continue to be enacted in subsequent phases through 2018.

Individual Mandate

Beginning in 2014, most U.S. citizens and legal residents must have and maintain a minimum level of health coverage or pay a federal tax penalty. The tax penalty is assessed according to a percent of income or a flat fee, whichever is greater, and will be applied on federal income tax returns.

Individuals can purchase coverage through March 31, 2014, to avoid the tax penalty.

Learn more about the individual mandate   from Kaiser Health News.

Montana's Health Insurance Exchange

ACA established health insurance marketplaces (also known as health insurance exchanges), where consumers can shop, compare and enroll in health insurance coverage. They are intended to create an organized and competitive market by offering a choice of plans, establishing common rules regarding the offering and pricing of insurance and providing information to help consumers better understand the options available.

Administrative Simplification

Administrative Simplification was introduced as a part of the Health Insurance Portability and Accountability Act (HIPAA) and is continuing under the Affordable Care Act (ACA). Under ACA, new operating rules are being established to streamline administrative processes, increase security of protected health information and promote greater uniformity in the exchange of electronic health care data.

Administrative Simplification can contribute to cost savings and help improve operational efficiencies for your office by:

  • Reducing paperwork
  • Increasing accessibility of electronic transactions
  • Promoting greater accuracy with faster results

Key Implementation Deadlines

The Committee on Operating Rules for Information Exchange (CORE) is part of the Council for Affordable Quality Healthcare (CAQH) initiative. CAQH CORE has authored the operating rules, which are to be implemented in phases for all HIPAA-standard electronic data interchange (EDI) transactions. Examples of important dates include:

  • Jan. 1, 2013 — Operating rules for Eligibility and Benefits (270/271) and Claim Status (276/277)
  • Jan. 1, 2014 — Operating rules for electronic payment and remittance transactions including 835 Electronic Funds Transfer (EFT) and 835 Electronic Remittance Advice (ERA)
  • Jan. 1, 2016 — Operating rules for electronic preauthorizations, referrals, claims and claims attachments
  • Nov. 7, 2016 — Use of Health Plan Identifiers (HPIDs) by covered entities

For additional information, articles and announcements about Administrative Simplification and other important initiatives at BCBSMT, please watch the Capsule News, as well as Announcements.

Helpful Links

Centers for Medicare & Medicaid Services (CMS) website   – Additional information may be found in the Regulations and Guidance section  , under HIPAA Administrative Simplification.

For details on the operating rules and related information, refer to the CORE section on the CAQH website  .

CAQH CORE is a multi-stakeholder collaboration of more than 130 organizations representing providers, health plans, vendors, government agencies, and standard-setting bodies developing operating rules to help simplify health care administrative transactions.

Patient Perspective

Under the Affordable Care Act (ACA), consumers may access new health care coverage that includes coverage of preventive care services. Many of our new insurance products are designed to cover a core set of essential health benefits. A quick summary of health care coverage and services that may affect your patients is listed below.

Annual Dollar Limits

Generally, ACA prohibits group health plans and insurers that offer health insurance coverage from imposing annual limits on the dollar value of essential health benefits. This provision is effective for plan/policy years beginning on or after Sept. 23, 2010. Grandfathered individual market policies are exempt from this provision. However, ACA and federal regulations indicate that, for plan/policy years beginning before Jan. 1, 2014, a plan or coverage may establish restricted annual limits on the dollar value of some essential health benefits.

Deductible Limits

Beginning in Jan.1, 2014, ACA places cost-sharing limits on non-grandfathered small group plans. Small group plans may not have a deductible higher than $2,000 for individuals and $4,000 for families.

Dependent Coverage

ACA makes health insurance more widely available to dependent children. This provision requires group health plans and insurers that offer health insurance for dependent children to make coverage available for children (married or unmarried) until age 26.

Essential Health Benefits

Certain health benefits that are deemed "essential" must be offered by non-grandfathered individual plans and non-grandfathered fully insured small group plans both on and off the exchange in 2014. No lifetime maximums or annual dollar limits are allowed on these 10 essential health benefit categories as defined by a benchmark plan selected by the government beginning in 2014:

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance abuse disorder services, including behavioral health treatment
  • Prescription drugs
  • Habilitative and rehabilitative services and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services

Grandfathered Health Plans

A grandfathered health plan is a group health plan or health insurance coverage that was in effect (and had at least one individual enrolled) on March 23, 2010, and has not made certain changes since that date to cause a loss of grandfathered health plan status. Some of ACA requirements do not apply to grandfathered health plans.

Lifetime Dollar Limits

ACA prohibits group health plans and insurers that offer health insurance coverage from imposing lifetime limits on the dollar value of essential health benefits. This provision is effective for plan/policy years beginning on or after Sept. 23, 2010. For plan years beginning on or after Jan. 1, 2014, group health plans may not establish any annual dollar limits on essential health benefits.

Pre-existing Conditions

Beginning Jan.1, 2014, individuals cannot be denied coverage because of a pre-existing condition. ACA protects these individuals from having to pay higher rates or have benefits limited to exclude these conditions.

Preventive Services

ACA requires non-grandfathered health plans and policies to provide coverage for preventive care services without cost-sharing (such as coinsurance, deductible or copayment), when the member uses a network provider. Services may include screenings, immunizations, and other types of care, as recommended by the federal government.

A list of preventive care services  can be accessed from the Department of Health and Human Services (HHS) website.

Women's Health Benefits

With the coverage provided by ACA, a number of new preventive services for women may be covered with no cost-sharing on or after Aug. 1, 2012, when using a provider in their plan/policy network. These services include:

  • Well-woman visits
  • Screening for gestational diabetes
  • Testing for Human Papillomavirus Virus (HPV) in women at least 30 years old
  • Counseling for sexually transmitted infections
  • Screening and counseling for Human Immunodeficiency Virus (HIV)
  • U.S. Food and Drug Administration (FDA) approved contraception methods and counseling
  • Breastfeeding support, supplies and counseling
  • Interpersonal and domestic violence screening and counseling
  • Contraceptive coverage

Risk Adjustment

Risk Adjustment levels the playing field by discouraging adverse selection of members through a two-step process: Risk Assessment, which evaluates the health risk status of an individual to create a clinical profile; and Risk Adjustment, which determines the resource utilization needed to provide medical care to an individual.

Accurate Medical Records

Providers play a critical role in helping ensure the integrity of the data used in calculating overall health risk by providing:

  • Medical record documentation sufficient to support ICD-9-CM coding to the highest level of specificity for claim/encounter data submission and risk trends
  • Adherence to ICD-9-CM industry and reporting coding guidelines for conditions that are monitored, evaluated, assessed or treated (MEAT)
  • A comprehensive health status for each patient
  • Accurate, ICD-9-CM coding for every patient, every time

Reinsurance and Risk Corridors

Reinsurance and Risk Corridors are two temporary programs also established by ACA.

Reinsurance is a transitional program established in each state to help stabilize premiums for individuals with higher cost needs who obtain insurance coverage during the first three years (2014 through 2016) of individual marketplace operation.

Risk Corridors are designed to protect against the uncertainty in rate setting during the first three years of the Marketplaces by creating a mechanism for sharing risk between the federal government and qualified health plan payers.

Helpful Industry Links

Read more about the new Risk Adjustment, Reinsurance and Risk Corridors standards in the Federal Register  PDF Document.

Regulatory Overview/HHS Risk Adjustment Model

Clinical Documentation/Coding