<aside> ⛔ CONFIDENTIAL — Please do not re-distribute.
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<aside> 📢 FYI The language below is provided as a template. Goodbill counsel is available — at no additional cost — to review your specific SPDs to ensure compliance with the 501(r) program.
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SPD modification involves adding roughly 2 concepts:
These modifications do not reduce benefits whatsoever, they merely modify the price paid for covered benefits. Accordingly, the Summary of Material Modification (SMM) resulting from these changes must be sent to participants no later than 210 days after the end of the plan year in which the change was adopted.
Modification will touch 5 SPD sections:
Include in your Plan Introduction or similarly applicable section:
IMPORTANT NOTICE: BENEFITS AVAILABLE FOR PAYMENT TO NETWORK PROVIDERS ARE LIMITED BY THE TERMS OF THIS PLAN. THIS MEANS THAT IF A NETWORK PROVIDER SUBMITS CHARGES THAT EXCEED THE AMOUNT ELIGIBLE FOR PAYMENT IN ACCORDANCE WITH THE TERMS AND CONDITIONS HEREIN OR ARE FOR SERVICES OR SUPPLIES FOR WHICH PLAN COVERAGE IS NOT AVAILABLE OR ARE FOR SERVICES OR SUPPLIES EXCLUDED FROM COVERAGE BY THE TERMS AND CONDITIONS HEREIN, BENEFITS WILL NOT BE PAID. BENEFITS WILL BE PAID AT ALL TIMES IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS PLAN, AND THE TERMS OF THIS PLAN DOCUMENT TAKE PRECEDENCE OVER THE TERMS OF ANY CONFLICTING CONTRACTUAL LANGUAGE CONTAINED IN ANY CONTRACT WITH A SERVICE PROVIDER TO THE PLAN.
Modify your Maximum Allowable Charge Limitation language to more closely reflect the below:
MAXIMUM ALLOWABLE CHARGE LIMITATION
The Plan has a fiduciary obligation to its participants to preserve Plan assets against charges that exceed the Maximum Allowable Charge. The “Maximum Allowable Charge” is the total amount payable for a specific covered item under this Plan. The Plan only pays benefits based on the Maximum Allowable Charge rather than billed charges. If a Provider charges more than the Maximum Allowable Charge (as determined by the Plan), the Plan Participant may be responsible for the amount in excess of the Maximum Allowable Charge, unless prohibited by applicable law. Any excess amount charged to the Plan Participant is not counted toward satisfaction of the Deductible, and it is not paid by the Plan even after satisfaction of the Deductible.
The Maximum Allowable Charge will not include charges for Unbundling, as defined by this Plan Document, which includes any items billed separately that are customarily included in a global billing procedure code in accordance with the American Medical Association’s CPT® (Current Procedural Terminology) and/or the Healthcare Common Procedure Coding System (HCPCS) codes used by CMS.
The Maximum Allowable Charge will be limited to an amount which, in the Plan Administrator’s discretion, is not unreasonably marked-up or inflated such that the costs are significantly higher than the median rates in the community for similar services and/or supplies provided by similarly skilled and trained Providers of care. Any charge for services or supplies marked up higher than 200% of Medicare is presumptively unreasonable under this Plan and will be reduced according to the provisions contained in this definition, unless the provider is able to rebut that presumption to the Plan Administrator’s satisfaction.
Add the following section to your SPD’s Plan Exclusions:
Financial Assistance. Charges for care which a hospital ordinarily charges a fee, but which is provided free or at a reduced rate to patients who cannot afford to pay but who are not eligible for public programs such as Medicare or Medicaid and who qualify for a free or reduced rate in accordance with the hospital's financial assistance policy. Covered expenses will be reduced to the extent of financial assistance provided.
Add the following term to your SPD’s Defined Terms section: