Supreme Court sets March date for contraceptive mandate arguments

The Supreme Court has set a 90-minute hearing on March 23, 2016, for the seven cases challenging the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) contraceptive mandate. The challenges seek a decision from the Supreme Court overturning the ACA requirement that non-profit groups take action to opt out of the mandate, allowing them to benefit from the blanket exclusion granted to churches and other religious institutions (see Supreme Court will hear 7 challenges to contraceptive mandate, Health Reform WK-EDGE, November 10, 2015).

Non-profits challenge

At issue is whether the contraceptive coverage mandate and its accommodation process, which requires the filing of additional paperwork stating objections to the provision of contraceptives, violate the Religious Freedom Restoration Act (RFRA) (P.L. 103-141) by forcing religious nonprofits to act in violation of their sincerely held religious beliefs, when the government has not proven that the compulsion is the least restrictive means of advancing any compelling interest. The accommodation itself, the organizations argue, is a substantial burden on their religious exercise.

The Supreme Court will rule on whether the mandate and the accommodation violate the RFRA, but refused specifically to hear claims under the RFRA and the First Amendment that the government discriminated between those allowed an exemption and those not.

ACA implementation

The March hearing before the Supreme Court highlights the challenges found in implementing the contraceptive mandate. Despite these challenges, the ACA provision for contraceptive coverage has already directly benefited millions of women who use contraceptives by decreasing their total out-of-pocket spending on contraceptives.

According to researchers at Washington University in St. Louis, prior to the ACA, high initial costs were barriers to women using highly effective contraceptive methods such as intrauterine devices (IUDs) and implants. Cost also affected adherence to commonly used refillable methods such as oral contraceptive pills, the contraceptive patch, or the vaginal ring with recurring prescription co-payments previously required.

The researchers noted that the provision for contraceptive coverage has the potential to substantially improve public health. Access to contraception without financial barriers reduces unintended pregnancies and births, which in turn can improve maternal and infant health.

CMS clarifies user fee adjustment mechanism for contraception accommodation

Third-party administrators (TPAs) must submit the Notice of Intent Disclosure Form to CMS stating their intention to seek a user fee adjustment even though the original deadline has passed. CMS has issued answers to frequently asked questions for TPAs, pharmacy benefit managers (PBMs), and federally-facilitated marketplace (FFM) issuers who are seeking reimbursement for contraceptive services. The information that these parties must submit will allow CMS to determine the discount to be applied to the user fee paid for participation on the FFM (CMS FAQ, November 9, 2015).

User fee discount

The government has provided an accommodation for self-insured nonprofit religious organizations that object to the contraceptive coverage mandate found in sections 1001 and 1004 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). Under the accommodation, the nonprofit or their TPA notifies HHS of the objection. The TPA will cover the contraceptive services and will contract with an FFM issuer. The FFM reduces the issuer’s marketplace user fee to account for the payment made to the TPA to cover the services. In order to receive this discount, FFM issuers and TPAs must submit certain information to CMS.

FAQs

TPAs and PBMs must submit the notice of intent form by November 13, 2015, via email. FFM issuers seeking the 2014 benefit year adjustment should submit their spreadsheets by December 11, 2015. CMS will provide webinar training on completing the forms. The document contains instructions regarding recipient email address, subject lines, and attachments.

CMS clarifies that PBMs can enter in the same arrangements as TPAs to provide contraceptive services. PBMs must follow the requirements imposed on TPAs. However, if the TPA or PBM and the FFM issuer are part of the same entity or parent company, only the FFM should submit its spreadsheet. If the entities are separate, the TPA must submit its form indicating the total value of eligible paid claims.

The user fee discount is limited to the dollar amount of contraceptive claims. CMS intends to deduct the appropriate amount from the issuer’s monthly obligation at the end of the 2015 calendar year. The FFM issuer is also eligible for an additional 15 percent payment for administrative costs. Although CMS has not established reimbursement for TPA or PBM administrative costs, these groups may require that the FFM share part of its administrative payment.