Shakespeare wrote, "that which we call a rose would smell as sweet by any other name." I have a new name for the ‘‘Patient
Protection and Affordable Care Act’’
The Federal Health Care Insurance
Regulatory Tax Act
Last I blogged about the taxes added or modified in the Health Care Act. I promised I would next address the penalties. There are 132 instances of the word "penalty" in the Act. The first one I came upon was in
PATIENT PROTECTION AND AFFORDABLE CARE ACT
SECTION 1
TITLE I—QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS
….
Subtitle B—Immediate Actions to Preserve and Expand Coverage
….
SEC. 1104 ADMINISTRATIVE SIMPLIFICATION
….
Before I list this section on Penalties let me point out that this is section j. After section j I have included section h (which is two sections earlier) since it is the section that describes what the penalties are for. Here it comes.
(j) PENALTIES—
(1) PENALTY FEE—
(A) IN GENERAL—Not later than April 1, 2014, and annually
thereafter, the Secretary shall assess a penalty fee (as determined under
subparagraph (B)) against a health plan that has failed to meet the
requirements under subsection (h) with respect to certification and
documentation
of compliance with—
(i) the standards and
associated operating rules described under paragraph (1) of such subsection;
and
(ii) a standard (as
described under subsection (a)(1)(B)) and associated operating rules (as described
under subsection (i)(5)) for any other financial and administrative transactions.
(B) FEE AMOUNT—Subject to subparagraphs (C), (D), and (E),
the Secretary shall assess a penalty fee against a health plan in the amount of
$1 per covered life until certification is complete. The penalty shall be
assessed per person covered by the plan for which its data systems for major
medical policies are not in compliance and shall be imposed against the health plan
for each day that the plan is not in compliance with the requirements under
subsection (h).
(C) ADDITIONAL
PENALTY FOR MISREPRESENTATION.—A health plan that knowingly provides inaccurate
or incomplete information in a statement of certification or documentation of compliance under subsection (h) shall be subject to a
penalty fee that is double the amount that would otherwise be imposed under
this subsection.
(D) ANNUAL FEE INCREASE.—The
amount of the penalty fee imposed under this subsection shall be increased on
an annual basis by the annual percentage increase in total national health care
expenditures, as determined by the Secretary.
(E) PENALTY LIMIT—A
penalty fee assessed against a health plan under this subsection shall not
exceed, on an annual basis—
(i) an amount equal
to $20 per covered life under such plan; or
(ii) an amount equal
to $40 per covered life under the plan if such plan has knowingly provided
inaccurate or incomplete information (as described under subparagraph (C)).
(F) DETERMINATION OF
COVERED INDIVIDUALS—The Secretary shall determine the number of covered lives under
a health plan based upon the most recent statements and filings that have been
submitted by such plan to the Securities and Exchange Commission.
(2) NOTICE AND
DISPUTE PROCEDURE.—The Secretary shall establish a procedure for assessment of
penalty fees under this subsection that provides a health plan with reasonable
notice and a dispute resolution procedure prior to provision of a notice of
assessment by the Secretary of the Treasury (as described under paragraph
(4)(B)).
(3) PENALTY FEE
REPORT.—Not later than May 1, 2014, and annually thereafter, the Secretary
shall provide the Secretary of the Treasury with a report identifying those
health plans that have been assessed a penalty fee under this subsection.
(4) COLLECTION OF
PENALTY FEE—
(A) IN GENERAL.—The
Secretary of the Treasury, acting through the Financial Management Service,
shall administer the collection of penalty fees from health plans that have
been identified by the Secretary in the penalty fee report provided under
paragraph (3).
(B) NOTICE.—Not later
than August 1, 2014, and annually thereafter, the Secretary of the Treasury
shall provide notice to each health plan that has been assessed a penalty fee
by the Secretary under this subsection. Such notice shall include the amount of
the penalty fee assessed by the Secretary and the due date for payment of such
fee to the Secretary of the Treasury (as described in subparagraph (C)).
(C) PAYMENT DUE
DATE.—Payment by a health plan for a penalty fee assessed under this subsection
shall be made to the Secretary of the Treasury not later than November 1, 2014,
and annually thereafter.
(D) UNPAID PENALTY
FEES.—Any amount of a penalty fee assessed against a health plan under this
subsection for which payment has not been made by the due date provided under subparagraph (C) shall be—
(i) increased by the
interest accrued on such amount, as determined pursuant to the under-payment rate
established under section 6621 of the Internal Revenue Code of 1986; and
(ii) treated as a past-due,
legally enforceable debt owed to a Federal agency for purposes of section 6402(d)
of the Internal Revenue Code of 1986.
(E) ADMINISTRATIVE
FEES.—Any fee charged or allocated for collection activities conducted by the
Financial Management Service will be passed on to a health plan on a pro-rata
basis and added to any penalty fee collected from the plan.
(h) COMPLIANCE—
(1) HEALTH PLAN
CERTIFICATION.—
(A) ELIGIBILITY FOR A
HEALTH PLAN, HEALTH CLAIM STATUS, ELECTRONIC FUNDS TRANSFERS, HEALTH CARE
PAYMENT AND REMITTANCE ADVICE.—Not later than December 31, 2013, a health plan
shall file a statement with the Secretary, in such form as the Secretary may
require, certifying that the data and information systems for such plan are in
compliance with any applicable standards (as described under paragraph (7) of
section 1171) and associated operating rules (as described under paragraph (9)
of such section) for electronic funds transfers, eligibility for a health plan,
health claim status, and health care payment and remittance advice, respectively.
(B) HEALTH CLAIMS OR
EQUIVALENT ENCOUNTER INFORMATION, ENROLLMENT AND DISENROLLMENT IN A HEALTH PLAN,
HEALTH PLAN PREMIUM PAYMENTS, HEALTH CLAIMS ATTACHMENTS, REFERRAL CERTIFICATION
AND AUTHORIZATION.—
Not later than December 31, 2015, a health plan shall file a
statement with the Secretary, in such form as the Secretary may require,
certifying that the data and information systems for such plan are in
compliance with any applicable standards and associated operating rules for
health claims or equivalent encounter information, enrollment and disenrollment
in a health plan, health plan premium payments, health claims attachments, and referral
certification and authorization, respectively. A health plan shall provide the
same level of documentation to certify compliance with such transactions as is
required to certify compliance with the transactions specified in subparagraph
(A).
(2) DOCUMENTATION OF COMPLIANCE.—A
health plan shall provide the Secretary, in such form as the Secretary may
require, with adequate documentation of compliance with the
standards and operating rules described under paragraph (1).
A health plan shall not be considered to have provided adequate documentation
and shall not be certified as being in compliance with such standards, unless
the health plan—
(A) demonstrates to
the Secretary that the plan conducts the electronic transactions specified in
paragraph (1) in a manner that fully complies with the regulations of the Secretary;
and
(B) provides documentation
showing that the plan has completed end-to-end testing for such transactions with
their partners, such as hospitals and physicians.
(3) SERVICE
CONTRACTS.—A health plan shall be required to ensure that any entities that
provide services pursuant to a contract with such health plan shall comply with
any applicable certification and compliance requirements (and provide the Secretary
with adequate documentation of such compliance) under this subsection.
(4) CERTIFICATION BY
OUTSIDE ENTITY.—The Secretary may designate independent, outside entities to
certify that a health plan has complied with the requirements under this subsection,
provided that the certification standards employed by such entities are in
accordance with any standards or operating rules issued by the Secretary.
(5) COMPLIANCE WITH REVISED
STANDARDS AND OPERATING RULES.—
(A) IN GENERAL.—A health
plan (including entities described under paragraph (3)) shall file a statement
with the Secretary, in such form as the Secretary may require, certifying that
the data and information systems for such plan are in compliance with any
applicable revised standards and associated operating rules under this
subsection for any interim final rule promulgated by the Secretary under
subsection (i) that—
(i) amends any standard
or operating rule described under paragraph (1) of this subsection; or
(ii) establishes a
standard (as described under subsection (a)(1)(B)) or associated operating rules
(as described under subsection (i)(5)) for any other financial and
administrative transactions.
(B) DATE OF COMPLIANCE.—A
health plan shall comply with such requirements not later than the effective date
of the applicable standard or operating rule.
(6) AUDITS OF HEALTH
PLANS.—The Secretary shall conduct periodic audits to ensure that health plans
(including entities described under paragraph (3)) are in compliance with any
standards and operating rules that are described under paragraph (1) or
subsection (i)(5).
Yes indeed, I can see how this "simplifies" the whole health care insurance business. (This is all found in Sec. 1104, ADMINISTRATIVE SIMPLIFICATION.) And it will surely make our health care insurance premiums go down. I bet there are all sorts of groups who just can not wait to get into the health care insurance business.
