X. Federal Governmental Payments


Question 1: Do the HCRA surcharges apply to revenues received from federal governmental agencies?

Question 2: Does the HCRA surcharge apply to payments made by federal government programs or federal health benefit plans?

Question 3: Are patient coinsurance and deductible payments under benefit plans covered by the FEHBA, and the other federal government programs mentioned in the response to the previous question, subject to the surcharge provisions?



Question 1: Do the HCRA surcharges apply to revenues received from federal governmental agencies?

Answer 1: In general, payments made directly by federal governmental agencies are exempt from the HCRA surcharges. This exclusion does not automatically apply to payments made by federal governmental agencies in connection with employee health, workers' compensation and no-fault benefits (unless such payments are exempt pursuant to federal law as provided in the response to the following question) since, under the HCRA provisions, governmental agencies in this situation are acting in their role as employers rather than as governmental agencies. Consequently, payments to designated providers made by employee health benefits plans remain fully subject to the HCRA surcharges at a rate based upon the election decision of the organization providing coverage, and where inpatient hospital coverage is provided, the regional GME percentage assessment, if applicable.

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Question 2: Does the HCRA surcharge apply to payments made by federal government programs or federal health benefit plans?

Answer 2: Payments made under the auspices of the following to designated HCRA providers are exempt from the surcharges since they are considered to be payments made directly by federal governmental agencies:

CHAMPUS
Veterans Administration (VA) provider payments
Job Corps
Federal Correctional Facilities

In its role as an employer, the payments by both the insured (patient coinsurance, copays/deductible amounts) and the following federal government plans are exempt from the surcharges and covered lives assessment or regional GME percentage assessment for covered services∗ since specific federal statute governing the benefit plans preempts HCRA:

Uniformed Services Family Health Plan
Amtrack (pursuant to the Rail Passenger Service Act)
Benefit plans covered by the Federal Employees Health Benefits Act (FEHBA), including:

  • Governmental Employees Hospital Association (GEHA)
  • Mail Handlers´ Health Benefits Plan
  • Postmasters Benefit Plan
  • Special Agents Mutual Benefit Association (SAMBA)
  • United States Air Force Group Health Plan
  • NEXCOM (Effective 10/28/04)
  • American Postal Workers Union

The above lists are not meant to serve as a comprehensive listing of federal government programs/plans that is exempt from the surcharges. The Department continues to review any claims for exemption from the surcharge.

Surcharges are applicable for payments made for services NOT covered by the above plans (includes exhaustion of benefits). If the patient has no other insurance, then the non-covered services would be subject to the Self Pay-Uninsured Rate and no regional GME percentage assessment. If the patient has other insurance, and the service is a covered service of that plan, the surcharge rate is based on the election status of the plan, plus if an inpatient claim, a covered lives or regional GME percentage assessment, if applicable.

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Question 3: Are patient coinsurance and deductible payments under benefit plans covered by the FEHBA, and the other federal government programs mentioned in the response to the previous question, subject to the surcharge provisions?

Answer 3: PHL Section 2807-j(2)(f) provides that the total percentage allowance for patient deductibles and coinsurance amounts shall be the same percentage allowance applicable to payments by the primary payor covering the patient. Therefore, where a patient is making coinsurance and/or deductible payments to a designated provider for services covered under a benefit plan covered by one of the federal government programs mentioned in the response to the previous question, the surcharges do not apply. However, where an individual is making payments to a designated provider of service as a result of an exhaustion of benefits, or lack of benefits for a particular service, the individual shall be subject to the Self-Pay Uninsured Payor surcharge percentage.

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