Health plans

Group health plans and discrimination rules

Section 108 Division BB of the Consolidated Appropriations Act of 2021 requires the Departments of Labor, Health and Human Services and the Treasury (the “Departments”) to issue regulations under Section 2706(a) of the Public Health Services Act (the “Provision”). The provision prohibits group health plans and health insurance companies from discriminating, with respect to participation in a plan or coverage, against any health care provider who is acting “within the scope of their license or certification under applicable state law”. Once issued, these rules will have significant implications for group health plans and other stakeholders.

This post reports on a recent listening session organized by the departments which provided a forum to discuss the issues and allow interested parties to take a stand.


Section 2706(a) of the Public Health Services Act, as enacted by the Affordable Care Act, prohibits group health plans and health insurance companies from discriminating, with respect to attendance. to any plan or coverage, against any health care provider who is acting “within the scope of its license or certification under applicable state law.” Section 2706 (a) is incorporated by reference into Section 715(a)(1) of ERISA and Section 9815(a)(1) of the Internal Tax Code. Accordingly, the departments have concurrent jurisdiction over the implementation of This is also the reason why group health plans of all persuasions have an interest in the matter.

In FAQs released in April 2013, the departments said the provision was “self-enforcing”. The regulations, in their view, were therefore unnecessary. Soon after, lawmakers challenged the departments’ assessment. From S. Rep. No. 113-71 to 126 (July 11, 2013):

The purpose of this provision is to ensure that patients have the right to access health services covered by all licensed and certified providers in their state. The Committee is therefore concerned that the FAQ document published by [the Departments] on April 29, 2013, advises insurers that this non-discrimination provision allows them to exclude from participation entire categories of providers operating under state license or certification. Additionally, the FAQ informs insurers that Section 2706 permits discrimination in reimbursement rates based on broad “market considerations” rather than the more limited exception cited in the law for performance and quality. Section 2706 was specifically intended to prohibit these types of discrimination. The Committee believes that insurers should be made aware of their obligation under Section 2706 before their health insurance plans begin operating in 2014. The Committee directs HHS to work with the DOL and the Department of the Treasury to correct the FAQ to reflect the law and the intent of Congress within 30 days of the enactment of this law.

(Emphasis added).

The House of Representatives also questioned the inaction of the departments. In response, departments publish a revised version FAQs, which provided, in relevant part:

Q4. What is the department’s approach to Section 2706(a) of the PHS Act?

In light of the magnitude of the issues identified in the RFI comments, the departments reaffirm their current approach to enforcing section 2706(a) of the PHS Act. Until new guidance is issued, the departments will not take any enforcement action against a group health plan, or a health insurance issuer offering group or individual coverage, regarding the implementation implements the requirements of Section 2706(a) of the PHS Act so long as the plan or issuer uses a reasonable and good faith interpretation of the statutory provision…

Lawmakers were apparently irked by the lack of clarity about whether, or to what extent, a plan could exclude certain types of providers and continue to act under a “reasonable and good faith interpretation” of the law. The issue resurfaced in Section 108, Division BB of the Consolidated Appropriations Act of 2021, which requires departments to issue regulations under the provision.

The statute

Section 2706(a) of the Public Health Services Act reads as follows:

A group health plan and health insurance issuer offering group or individual health insurance coverage must not discriminate with respect to plan participation or coverage against any health care provider who acts in under that provider’s license or certification under applicable state law. This section does not require a group health plan or health insurance issuer to enter into a contract with a health care provider willing to comply with the terms of participation established by the plan or issuer. Nothing in this section shall be construed to prevent a group health insurance plan, health insurance issuer or the Secretary from establishing variable reimbursement rates based on quality or performance measures.

The rule consists of three sentences, two of which tell us what non-discrimination is not. The prescriptive rule in the article prohibits discrimination by a group health plan against “any health care provider who is acting within the scope of such provider’s license or certification under applicable state law.” . When drafting regulations, departments are going to have to specify what exactly constitutes discrimination. Although the rule seems simple enough, what it means for employer-sponsored group health plans is far from clear. For example:

Could a self-funded group health plan choose not to cover, for example, chiropractic services? The passage from the Senate report quoted above seems to think that this should not be allowed under the provision. But what distinguishes this reading of the rule from the establishment of a voluntary horticultural variety requirement? Or does that mean that if a plan chooses to cover chiropractic services, it must agree to contract with every licensed chiropractor in the state? And, if so, would even this limited reading pass the mark?

  • Can an employer vary the amounts paid to a supplier based on skills, geography, education, and experience in addition to quality measures?

Section 2706(a) does not say so.

We hope that is the case. It’s certainly consistent with the language that doesn’t require a contract with a willing provider.

Could the rule be interpreted as simply requiring that an employer/sponsor of a group health insurance plan be able to provide a good reason to treat claimants differently?

Part of the carrier’s value proposition is building and managing a network. To the extent departments interpret the provision broadly, this value proposition is potentially undermined.

The listening session

On January 19, 2022, the departments held what was billed as a “listening session” regarding provider non-discrimination under Section 2706(a) of the Public Health Services Act. The event featured presentations by more than a dozen representatives of trade associations with an interest in disposal, including carriers, various supplier organizations and trade-oriented organizations. While the participants in the listening session represented diverse and competing interests, there were some points of agreement. For example, the view that the provision is not an “any willing supplier” mandate was unanimous.

Unsurprisingly, the session also revealed some fault lines that divided interested parties. The suppliers generally advocated a broad reading of the rule, that is to say an “any authorized supplier” reading. The problem with this approach is that it would be difficult to distinguish between a voluntary any-provider rule and an “any approved provider” rule. Providers would also like to see payment parity for a particular service regardless of the provider’s license. Although such an approach would mark a radical departure from current practice, it does not appear to be prohibited on the basis of the text of the provision. Group health insurance plans, on the other hand, would prefer the status quo ante. The problem with that is, of course, that Congress must have intended the law to do something. Finally, carriers urged departments to protect their ability to design and monitor their networks. While their concern is understandable, it appears that there will be some impairment of this ability, if only at the margin.


The issues raised above prompt a fundamental question: what, if anything, remains of the first sentence of section 2706(a) of the Public Health Services Act once the second and third sentences applied? It is assumed that Congress must have intended there to be some residue. It is up to the Departments to determine the contours of this residue. Where they hang out could have huge implications for employer-sponsored group health plans.

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