Habilitative Services: An Essential Health Benefit and an Opportunity for Occupational Therapy Practitioners and Consumers

ACA Statutory Requirements for the Essential Health Benefits

The language in the ACA establishing the EHB requirements is only about two pages long. It specifies that the U.S. Department of Health and Human Services (HHS) shall define the EHBs and that they must include at least the following 10 categories of benefits:

The ACA also directs HHS to “ensure that the scope of the essential health benefits … is equal to the scope of benefits provided under a typical employer plan” (§ 1302(b)(2)). In addition, the law indicates criteria that HHS must consider when defining the EHBs, including the following: an “appropriate balance among the [benefit] categories,” a nondiscriminatory benefit design, and consideration of the diverse needs of the population (§ 1302(b)(4)). The ACA also stipulates that the EHB requirements apply to all health plans sold to individuals and small groups, as well as the Medicaid expansion population and other benchmark coverage 1 (Center for Consumer Information and Insurance Oversight [CCIIO], 2011).

Congress’s intent when passing legislation is often a matter for debate; however, some level of consensus exists as to what Congress’s purpose was in including the EHB requirements in the ACA. A bipartisan panel of congressional staff testified before an Institute of Medicine (IOM) committee that the intent was generally to ensure that both a minimum and a maximum level of benefits would be offered by plans subject to the EHB requirements (IOM, 2011b). The minimum constraint was established by the specification of the 10 categories of benefits that must be covered, and the maximum constraint was established by the requirement that the EHB package reflect the benefits included in a typical employer plan.

By creating these guidelines for HHS, presumably Congress intended for a balance to exist between comprehensiveness and cost of coverage. As an IOM report stated, “If the package of benefits is too narrow, health insurance might be meaningless; if it is too broad, insurance might become too expensive” (IOM, 2011a, p. xi). It also seems fair to assume that Congress intended that the EHB would provide a consistent package of benefits (IOM, 2011a) so that consumers could compare qualified health plans on the basis of price, network adequacy, and quality ratings instead of the fine print governing coverage and exclusions. Finally, it seems reasonable to deduce, as an IOM committee did, that “Congress sought to remediate what it saw as shortcomings in current coverage by pulling out certain categories to ensure that they were covered, such as … habilitative services” (IOM, 2011a, p. 61).

The highly general nature of the ACA’s requirements related to the EHBs, and the assignment of the development of detailed requirements to HHS, foretold the lengthy regulatory process that was forthcoming. Indeed, it took HHS almost 3 years after passage of the ACA in 2010 to develop final regulations governing EHB implementation, and the expectation remains that HHS will revisit and revise EHB regulations in the near future.

The American Occupational Therapy Association’s (AOTA’s) congressional lobbying efforts were instrumental in obtaining the inclusion of habilitative services in the ACA’s EHB requirements to reduce the likelihood that insurance carriers could continue to exclude habilitative occupational therapy services from coverage under their health plans. Although the ultimate effect of the inclusion of that language still is not fully known, having it in the law was a critical first step to improving access to habilitative occupational therapy services. Indeed, as a former congressional staffer mentioned in testimony to an IOM committee, although most of the EHB categories remained static during congressional debate on the ACA, the habilitation benefit was an important addition later in the process (IOM, 2011b).

Institute of Medicine’s Committee on Defining an Essential Health Benefits Package

Because the statutory EHB language contains a certain tension between competing goals (i.e., comprehensiveness vs. affordability), and because HHS was tasked with resolving and building a regulatory framework based on the statute, HHS commissioned the IOM to provide recommendations as to how it should proceed. The IOM formed the Committee on Defining and Revising an Essential Health Benefits Package for Qualified Health Plans (referred to here as “the Committee”), and its work began in late 2010 with an opportunity for the public to submit comments online. In addition, the Committee invited experts and stakeholders to present at two public workshops in early 2011 (IOM, 2011b). Ultimately, the Committee developed and disseminated two reports summarizing its activities and recommendations.

Although the Committee evaluated myriad topics, not surprisingly it spent a substantial amount of time focused on the question of how to develop an EHB package that balances generosity of health plan benefits with affordable premiums for those same plans (IOM, 2011a). In particular, it sought to identify what should be considered a typical employer plan because that term was a critical element of the statute’s constraint on the generosity of the EHBs. The Committee considered opinions that ran the gamut in addressing its charge. Of note, one insurance industry expert observed that even the health plans typically offered by large employers, which are usually more comprehensive than those of small employers, do not typically cover habilitative services (IOM, 2011b). This statement was indicative of a question that came up again and again during development of EHB regulations—that is, how to define coverage of habilitative services, an EHB that was almost completely absent from the existing market. In the end, the Committee decided for the purpose of the EHBs that a typical employer plan should be based on a small employer plan (IOM, 2011a).

Because certain EHB categories presented unique challenges for regulators, the Committee explored two benefit categories in greater detail than others. One of those was rehabilitative and habilitative services and devices (IOM, 2011b), the category of greatest importance to occupational therapy practitioners and consumers. One factor in determining congressional intent, although not a definitive one, was the floor statements of members of Congress. The most relevant statement on this subject came from Representative Bill Pascrell (D-NJ), cochair of the Congressional Brain Injury Task Force, who stated,

Peter Thomas, on behalf of the Consortium for Citizens with Disabilities (CCD), a coalition of which AOTA is a member, testified before the Committee and provided his own definitions for rehabilitation and habilitation. 2 Thomas made some important points, including the following: that the rehabilitation and habilitation benefit category should include services to maintain and prevent the deterioration of function, that rehabilitation and habilitation are distinct benefits, that people with disabilities in need of these services have greater than average needs, and that trying to identify typical employer coverage of these benefits may be difficult and inadequate (IOM, 2011b).

Other presenters also contributed valuable statements to the record. Gary Ulicny, a hospital executive and president of the American Congress of Rehabilitation Medicine, pointed out that patients needing rehabilitative and habilitative services present with a wide variety of needs and are not served well by benefits with arbitrary limitations. Marty Ford, also a representative of CCD, mentioned the federal Medicaid definition of habilitative services 3 —that habilitative services include occupational therapy and other services that could help prevent the need for more costly interventions, and she aptly described how rehabilitative and habilitative services are distinct, as well as the arbitrary basis under which coverage of habilitative services has commonly been denied by insurers in the past. Ford also noted that a number of states have adopted laws that require coverage of certain habilitative services, in some cases specifically mentioning occupational therapy as a habilitative service (IOM, 2011b).

Andrew Racine, testifying on behalf of the American Academy of Pediatrics, cautioned that “health plans have denied habilitative services on the grounds that [the effectiveness of] occupational therapy for children with cerebral palsy is not supported by evidence” (IOM, 2011b, p. 95). Racine was not supporting that position about the efficacy of occupational therapy. Instead, he made that statement in the context of pointing out that large-scale randomized controlled trials often are not available to evaluate services for children, and in the absence of such evidence, insurance companies should rely on “observational studies, professional standards of care, and the consensus of pediatric experts” instead of just denying coverage (IOM, 2011b).

AOTA submitted written comments to the Committee in December 2010. In reference to habilitation and rehabilitation, AOTA’s comments asserted that “medical necessity criteria should allow for coverage to: (1) develop skills or functioning; (2) maintain skills or functioning; (3) restore skills or functioning; and (4) prevent the loss of skills or functioning” (AOTA, 2010, p. 9).

Not all the testimony received was supportive of comprehensive coverage of habilitative services. For example, Carolyn Ingram of the Center for Health Care Strategies and Cindy Ehnes of the California Department of Managed Health Care expressed concerns that extensive coverage of habilitative services could result in unacceptably high increases in costs (IOM, 2011b). As will become apparent later in this article, all of the testimony raised issues that were discussed extensively by stakeholders and decision makers in the ensuing 2 years as EHB regulations were developed.

Another issue the Committee considered was the extent to which states should be given flexibility to develop their own EHB requirements. The expectation of the Committee was that HHS would interpret the EHB statute as requiring the development of a national EHB package and perhaps would allow states some flexibility to diverge from that national standard. In fact, the Committee recommended that HHS do just that (IOM, 2011a). In the end, HHS gave states much more flexibility than the Committee probably imagined. Although the Committee did recommend that states operating their own health insurance exchanges be given leeway to develop their own EHB packages, provided they meet certain standards (IOM, 2011a), the flexibility granted states by HHS’s final regulations was even more deferential.

Also of importance as the EHB regulations evolve, the Committee recommended requiring a sufficiently detailed description of benefits to ensure that consumers are protected from exclusions carriers may try to obscure in the fine print of coverage documents. It also suggested that a framework be developed to gather and analyze data about the specific effects of EHB implementation, including any problems consumers may have obtaining benefits (IOM, 2011a).

In addition, the Committee explored what various employer coverage included to determine which benefits listed in the ACA may have to be added to that coverage to meet the statutory requirements. Although one report the Committee cited indicated that occupational therapy services are covered by 92% of employer plans, not surprisingly habilitative services were typically not covered by existing plans unless a state had enacted a benefit mandate, and even then, the benefit usually included condition- or age-based limitations (or both). As a result, the Committee wrestled with how the EHB requirement for coverage of habilitation should be defined. In doing so, it considered the difficulty of establishing boundaries between medical care and social and educational services. It explored the possibility of using Medicaid as a model but was concerned that Medicaid coverage determinations were too dissimilar to those of a typical employer plan.

Ultimately, the Committee did not make a recommendation about how habilitation should be dealt with, aside from acknowledging that some of the EHBs, such as habilitation, are not typically found in employer plans but still must be incorporated into the EHB package (IOM, 2011a). In sum, although many of the recommendations the Committee made did not make it into HHS’s final regulations, the Committee’s reports provide some useful insights that may support future advocacy efforts to improve the EHB regulations.

National Association of Insurance Commissioners Summary of Benefits and Coverage Glossary

The ACA directed several federal agencies (i.e., HHS and the U.S. Departments of Labor and Treasury) to develop standards for the creation of a summary of benefits and coverage (SBC), which was to include a glossary defining terms often used to describe health insurance. The purpose was to “help consumers understand and compare the terms of coverage and the extent of medical benefits” (U.S. Department of the Treasury, U.S. Department of Labor, & HHS, 2012, p. 8678) in health insurance policies. In doing this, the agencies were required to consult with the National Association of Insurance Commissioners (NAIC). NAIC developed recommendations through a public deliberative process, and the agencies largely adopted these recommendations in their final regulations. Among those recommendations were to include the following definitions of rehabilitation and habilitation services in the SBC glossary (U.S. Department of the Treasury et al., 2012):

AOTA advocated with the NAIC to ensure that the definitions of rehabilitation and habilitation both included explicit mention of occupational therapy. The adoption of these definitions in federal regulations has proven useful in support of advocacy efforts related to the EHBs. AOTA and allied stakeholders have often cited the NAIC definition of habilitation as a model that states or the federal government should adopt as the basis to define coverage requirements for insurers, as opposed to merely as a generic description of coverage for consumers.

HHS Guidance and Regulations

Essential Health Benefits for Medicaid and the Multi-State Plan Program

The focus of this article has been the EHB regulatory process as it affects private insurance benefits, largely because the majority of regulatory documents and activities are focused on that aspect as well. However, the EHB requirements apply to new beneficiaries of Medicaid made eligible by the ACA, as well as to multistate plans that will eventually be sold on every state’s health insurance exchange, and will be administered by the U.S. Office of Personnel Management. Space does not permit a full explanation of EHB regulations for Medicaid and the Multi-State Plan Program, and AOTA’s advocacy efforts related to them, but many of the issues and requirements discussed in this article apply to those programs as well.

Partnering on Advocacy in the States

Although advocacy at the national level to develop strong standards for coverage of habilitative services met with limited success, AOTA partnered with state occupational therapy associations to positively influence a variety of state-specific definitions. States responded in varied ways to the guidance provided by HHS related to EHB implementation. Some states enacted legislation in 2012 in the wake of the issuance of the EHB Bulletin and began the process of selecting an EHB benchmark plan. However, in many cases, state officials seemed to be waiting for the outcome of the U.S. Supreme Court case challenging the constitutionality of the ACA before proceeding. Even after the Court largely upheld the ACA in June 2012, some states were hesitant to take action without formal regulations to guide them or without knowing the outcome of the 2012 elections, which also were seen as a potential threat to the ACA’s continued existence. In most states that actively engaged in EHB implementation, decisions were made outside the states’ legislatures, either by state agencies or ad hoc committees.

Ultimately, as mentioned earlier, HHS issued formal EHB regulations in November 2012. Those regulations maintained, and in some ways expanded, state flexibility in terms of influencing the development of state-specific EHBs. AOTA monitored state activities continuously, kept state occupational therapy associations informed, and advocated extensively, in particular to influence definitions of habilitative services. The following descriptions are of advocacy activities, and the outcomes of those activities, in select states.

Vision for the Future

Although development of EHB regulations and standards for coverage of habilitative services, as well as AOTA’s advocacy efforts on these issues, has been ongoing for years, the journey to ensure that consumers have access to habilitative occupational therapy services is not at an end. Success was achieved by obtaining the inclusion of habilitative services as an EHB in the ACA and having the NAIC develop a definition of the benefit for the consumer glossary that explicitly mentions occupational therapy. Yet efforts to influence HHS during the federal regulatory process produced mixed results because HHS elected to give states substantial flexibility instead of developing rigorous national standards. However, that flexibility provided to the states created opportunities that led to positive outcomes that can be used as examples during future advocacy activities. There are far more examples than described in this article. Arkansas, Colorado, Maryland, Rhode Island, and West Virginia are among the states that also adopted positive definitions of habilitation that can be cited, and the capacity of state occupational therapy associations to advocate on issues related to ACA implementation was enhanced. Nonetheless, there is more to do.

Of the utmost importance is educating occupational therapy practitioners and consumers about the existence of the EHBs and the inclusion of habilitative services within them. If consumers are unaware that their health insurance is required to cover this benefit, which has often been denied coverage in the past, then the intent of including it will not be achieved. In Maryland, a limited mandate to cover habilitative services has been in effect for many years, and evidence indicates that fewer people have accessed those services than had been expected, potentially because consumers were unaware of the benefit.

Equally important is educating decision makers within insurance companies, health insurance exchanges, state departments of insurance, and other venues about the difference between rehabilitative and habilitative services and about the fact that occupational therapy practitioners are skilled providers of both. As a result of the myriad changes to the health insurance regulatory environment that have come with implementation of the ACA, many people affiliated with these entities will not have familiarized themselves with all of the EHBs. In addition, because HHS has indicated that states will be primarily responsible for enforcement of the EHB requirements, it will be important for occupational therapy practitioners and consumers to know and assert their rights with insurers and regulators. It will likely be necessary in many cases to file appeals with insurance companies and potentially to file complaints with health insurance exchanges or state departments of insurance to ensure that the EHB requirements are fully complied with.

Because HHS indicated that it intends to revisit and potentially revise the EHB requirements, and the coverage standards for habilitation specifically, it will be important to gather as much information as possible on how the EHBs are being covered in each state to inform future advocacy efforts. To do that, it may be necessary to partner with allied organizations to share information. State occupational therapy associations are on the frontlines of these efforts and should seek to develop lines of communication with state physical and speech therapy associations and with organizations that advocate for the rights of occupational therapy consumers (e.g., state chapters of Easter Seals, The Arc, United Cerebral Palsy). In addition to sharing resources to monitor implementation of the EHBs, these relationships can facilitate partnerships when advocacy opportunities arise, as they inevitably will.

AOTA will seek to maintain a leadership role in terms of advocating for and educating occupational therapy practitioners and consumers about the EHBs and habilitative services. An active professional membership and established alliances will increase the likelihood of achieving the previously mentioned goals of educating practitioners and consumers about habilitation as an EHB, educating decision makers about the difference between rehabilitation and habilitation and occupational therapy practitioners’ expertise in both, and monitoring coverage of habilitation to inform future advocacy efforts.