Departments Announce Therapeutic Equivalence Approach to ACA Contraceptives Compliance | Practical Law

Departments Announce Therapeutic Equivalence Approach to ACA Contraceptives Compliance | Practical Law

The Departments of Labor (DOL), Health and Human Services (HHS), and Treasury have issued additional FAQ guidance addressing first-dollar coverage of contraceptives under the Affordable Care Act's (ACA's) preventive health services rules. The FAQs include a therapeutic equivalence approach for complying with the ACA's contraceptives mandate.

Departments Announce Therapeutic Equivalence Approach to ACA Contraceptives Compliance

by Practical Law Employee Benefits & Executive Compensation
Published on 23 Jan 2024USA (National/Federal)
The Departments of Labor (DOL), Health and Human Services (HHS), and Treasury have issued additional FAQ guidance addressing first-dollar coverage of contraceptives under the Affordable Care Act's (ACA's) preventive health services rules. The FAQs include a therapeutic equivalence approach for complying with the ACA's contraceptives mandate.
In guidance addressing the Affordable Care Act's (ACA's) contraceptives mandate, the DOL, HHS, and Treasury (collectively, Departments) have announced a therapeutic equivalence approach for use by group health plans and health insurers in complying with the mandate (FAQ guidance (Jan. 22, 2024) and press release; see Practice Notes, Contraceptives Coverage Under the ACA and Contraceptives Coverage Under the ACA: Accommodations and Other Issues). The approach is available as an alternative to complying with the contraceptives mandate using the Departments' current implementing guidance.

Overview of ACA Contraceptives Mandate

Under the ACA's contraceptives rules, as background, non-grandfathered group health plans and health insurers must provide first-dollar coverage of all Food and Drug Administration (FDA)-approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity, as prescribed by a health provider (Section 2713 of the Public Health Service Act (PHSA) (29 C.F.R. § 2590.715-2713A)). The mandate includes preventive care and screenings provided for in comprehensive guidelines supported by the Health Resources Services Administration (HRSA). For recommendations or guidelines that do not identify the frequency, method, treatment, or setting for furnishing a recommended preventive service, a plan or insurer may use reasonable medical management techniques to set coverage limitations. (For more information on reasonable medical management standards, see Practice Note, Contraceptives Coverage Under the ACA: Overview: Reasonable Medical Management Permitted, Subject to Exceptions Process.)
Plans and insurers must cover, without cost-sharing, at least one form of contraception in each of the methods identified for women by the FDA in its current Birth Control Guide. This list currently includes items and services such as:
  • Sterilization surgery for women.
  • Implantable rods.
  • Copper intrauterine devices or intrauterine devices with progestin (all durations and doses).
  • Injectable contraceptives.
  • Oral contraceptives (combined pill, progestin only, or extended/continuous use).
  • The contraceptive patch.
  • Vaginal contraceptive rings.
  • Diaphragms.
  • Contraceptive sponges.
  • Cervical caps.
  • Condoms.
  • Spermicides.
  • Emergency contraception (levonorgestrel or ulipristal acetate).
  • Any additional contraceptives that are approved, cleared, or granted by the FDA.
The current administration has issued executive orders intended to improve individuals' ability to access contraception without out-of-pocket expenses (for example, see Executive Order 14101, 88 Fed. Reg. 41815 (June 28, 2023) and Legal Update, White House Post-Dobbs Order Calls for Greater Access to OTC and Emergency Contraceptives).
Beginning in July 2022, the Departments interpreted the contraceptives mandate as requiring plans and insurers to cover, without cost-sharing:
  • At least one form of contraception in each of the categories listed in the HRSA-supported guidelines.
  • Any contraceptive services and FDA-approved, -cleared, or -granted products that an individual and their attending health provider determined were medically appropriate for the individual.
The latter coverage rule applies regardless of whether the services or products at issue have been specifically identified in the listed categories under the HRSA-supported guidelines (FAQ guidance (July 28, 2022); see Practice Note, Contraceptives Coverage Under the ACA: Coverage of Products and Services Not Included In Categories Described in HRSA Guidelines).

Therapeutic Equivalence Approach

The January 2024 FAQs include an alternative approach that plans and insurers may use to comply with the ACA's contraceptives mandate (as implemented). As noted, the contraceptives mandate requires coverage for the full-range of FDA-approved contraceptive drugs and drug-led devices without cost-sharing. A drug-led device refers to a combination product comprised of both a drug and device, but for which the drug component is the primary mode of action (21 C.F.R. § 3.2(e)). Plans and insurers may adopt the therapeutic equivalence approach going forward under the FAQ guidance, which was issued on January 22, 2024.
The therapeutic equivalence approach is an alternative to the Departments' existing regulatory guidance for complying with the contraceptives mandate—which plans and insurers may continue to follow. Going forward, plans and insurers may use either approach to comply with the mandate.
Regarding FDA-approved contraceptive drugs and drug-led devices, the alternative approach is available if a plan or insurer uses medical management techniques within either:
  • A specified category described in the HRSA-supported guidelines.
  • A group of substantially similar products that are not included in a specified category.
Under the alternative approach, the Departments will generally consider these medical management techniques to be reasonable if the plan or insurer covers—without cost-sharing—all FDA-approved contraceptive drugs and drug-led devices in that category (or group of substantially similar products), except those for which there is at least one therapeutic equivalent drug or drug-led device that the plan or insurer covers without cost-sharing.
Under the alternative approach, however, a plan's or insurer's medical management techniques are only considered reasonable if the plan or insurer provides an exceptions process that meets certain criteria (see Exceptions Process Requirement). Specifically, the exceptions process must allow an individual to access (without cost-sharing) the specific contraceptive drug or drug-led device (that is a therapeutic equivalent to the product covered without cost-sharing) that is medically necessary for the individual, as determined by the individual's attending provider.

Making Therapeutic Equivalence Determinations

Under the January 2024 FAQs, a contraceptive drug or drug-led device will be considered therapeutically equivalent to another drug or drug-led device if the drug products or drug-led devices are identified as therapeutic equivalents in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations (known as the Orange Book). This means the therapeutic equivalents are designated with a code having the first letter "A" in the Orange Book.
If the Orange Book has not identified any therapeutic equivalents for a particular drug or drug-led device, the Departments will view that drug or drug-led device as not having a therapeutic equivalent. For example, there are presently four FDA-approved products available under the category of "intrauterine devices with progestin (all durations and doses)" (see Practice Note, Contraceptives Coverage Under the ACA: Overview: List of Required Contraceptive Methods). However, because none of these four products are listed in the Orange Book as therapeutic equivalents to each other, the Departments will treat these products as having no therapeutic equivalent. An example in the FAQs expands on these rules.

Applicability of Departments' Therapeutic Equivalence Approach

The alternative approach to reasonable medical management for therapeutically equivalent products does not apply to all forms of contraception required to be covered under the contraceptives mandate. For example, the Orange Book does not list forms of contraception that are not FDA-approved drugs or drug-led devices. As a result, the therapeutic equivalence approach does not apply to these other forms of contraception.

Exceptions Process Requirement

In July 2022, the Departments clarified that a plan's or insurer's medical management techniques are not reasonable unless the plan or insurer adopts an "easily accessible, transparent, and sufficiently expedient" exceptions process that is not unduly burdensome on:
  • The individual.
  • The individual's health provider.
  • Another individual acting as the individual's authorized representative.
Under the January 2024 FAQs, a plan or insurer must still maintain an exceptions process—even if it covers (without cost-sharing) all FDA-approved contraceptive drugs or contraceptive drug-led devices other than those for which there is a covered therapeutic equivalent. In other words, medical management techniques are not considered reasonable without an exceptions process.
According to the Departments, all plans and insurers are expected to have an exceptions process available to ensure that individuals can access coverage without cost-sharing for a contraceptive service or FDA-approved, -cleared, or -granted contraceptive product that is:
  • Medically necessary for the individual (as determined by the individual's attending provider).
  • Otherwise not covered without cost-sharing.
The exceptions process rules also apply to contraceptive drugs or drug-led devices for which there is a covered therapeutic equivalent.
In the Departments' view, having an exceptions process is important for ensuring that individuals can access required contraceptives and contraceptive care. However, plans and insurers that choose to provide coverage using the therapeutic equivalence approach may have fewer situations where the exceptions process will be used.

Ongoing Concerns Over Lack of Reasonable Medical Management Techniques

As noted, plans and insurers can still comply with the ACA's contraceptives mandate regarding coverage of the full range of FDA-approved, -cleared, or -granted products (including for contraceptive drugs and drug-led devices) by complying with the Departments' existing contraceptives guidance (see Abortion and Contraceptives Services for Group Health Plans Toolkit). This guidance includes a compliant exceptions process.
In the January 2024 FAQs, however, the Departments noted their ongoing concern over reports of plans using unreasonable medical management techniques and other potentially non-compliant practices. These problematic techniques and practices include:
  • Requiring individuals to "fail first" using other services or FDA-approved contraceptive products within the same contraception method before a plan or insurer will approve coverage for the service or FDA-approved contraceptive product that is medically appropriate for the individual, as determined by the individual's attending provider. (This practice is also known as a step-therapy protocol.)
  • Applying age-related restrictions for contraceptive services or products that are medically necessary for the individual, as determined by the individual's provider.
  • Imposing an exceptions process that includes burdensome administrative requirements, for example, excessive documentation requirements or multiple levels of processes, resulting in coverage denials (or imposing cost-sharing) for contraceptives that are medically necessary for the individual, as determined by the individual's provider.
  • Requiring cost-sharing for services that are integral to the preventive service provided, for example:
    • anesthesia;
    • pregnancy tests needed in order to furnish certain forms of contraceptives; or
    • other pre- and post-operative items and services that are critical to delivering sterilization surgeries (such as tubal ligation).
The Departments have noted that they:
  • Are actively investigating individuals' complaints and reports of noncompliance.
  • May take enforcement or other corrective actions.

Practical Impact

According to the administration's press release, the January 2024 FAQs are part of a larger initiative to promote access to ACA contraceptives (including emergency contraception). Relatedly, the Departments noted that they are continuing to review comments received in response to a 2023 request for information (RFI) concerning how the ACA's preventive health services rules apply to over-the-counter (OTC) preventive items and services available without cost-sharing and without a prescription from a health provider (88 Fed. Reg. 68519 (Oct. 4, 2023)). The Departments are evaluating what administrative action (if any) to take regarding these preventive health products in response to the RFI comments.