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Departments Delay Transparency in Coverage Health Plan Notice and Disclosure Requirements

On Friday, the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury announced delays and clarifications to the upcoming notice and disclosure responsibilities for health plans and health insurers.

Both the final regulation on Transparency in Coverage (TiC) rule, issued October 29, 2020, and the transparency requirements provisions for plans and issuers within the Consolidated Appropriations Act of 2021 (CAA) require notice and disclosure of health plan costs beginning either December 27, 2021, or January 1, 2022. Due to confusion, lack and availability of information, and conflicting information between the two documents, the joint Departments extended the compliance dates for certain provisions of these rules until they issue additional clarifications and guidance. Additional FAQs about Affordable Care Act and Consolidated Appropriations Act, 2021 Implementation Part 49 can be viewed here.

Background

Consumer price transparency, and the lack thereof, has been under scrutiny for a long time. The removal of actual health care costs from a consumer’s line of sight at the time of purchase began with managed care plans in the 1990s. Among other things, experts claiming to “simplify” things for the consumers, began showing only the participant’s share of the cost rather than the actual cost of the medical good and service. (Example: individuals only see the copayment they owe the doctor at the time of service and do not see the actual cost of the service.)

This lack of transparency is thought, by many, to be a significant factor in the increasing cost of health care goods and services. Over time, the lack of knowledge of the cost of the product or service results in consumers unknowingly purchasing higher-cost services or using services more than they might otherwise. This lack of transparency also removes accountability and competition affording an environment ripe for entities to raise costs higher than demand or the consumer price index dictates.

Lawmakers and regulators, under both the Trump and Biden Administrations, clearly intend to improve transparency. On October 29, 2020, the Departments issued the TiC Final Rules requiring health plans and providers to publicly disclose certain health plan information and shopping tools for consumers. Subsequently, legislators passed the CAA, imposing similar and additional transparency requirements on employers. The TiC Final Rules require group health plans and health insurance issuers to: 1) publicly disclose on a website in-network provider negotiated rates, historical out-of-network allowed amounts, and drug pricing data through machine-readable files; and 2) disclose, upon request, cost-sharing information including an estimate of a participant’s cost-sharing liability for covered items and services via an online tool. The CAA’s transparency efforts include requiring reporting on pharmacy benefits and prescription drug costs, removal of gag clauses on price and quality information, formal analyses of compliance with the Mental Health Parity Addiction and Equity Act, and disclosures of compensation paid to brokers or consultants.
[Explanation of TiC requirements | Explanation of CAA provisions].

These complex regulations set forth new responsibilities for health plans, employers, and health insurers. Several elements include technology, reporting, and the public posting of information. While good for creating a transparent environment, these new mandates will require additional cost, infrastructure, and information not currently available in today’s marketplace. There is great concern by entities and groups that they will be unable to build these new solutions in time to meet the deadlines.

Enforcement Delay

In response to the many concerns and challenges, the Departments clarified their August 20 FAQs. According to the FAQs, the Departments will defer enforcement in the following areas:

  1. TiC Final Rules requiring plans and issuers to publish machine-readable files relating to prescription drug pricing pending further rule making
  2. TiC Final Rules’ requiring plans and issuers to publish the remaining machine-readable files until July 1, 2022
  3. CAA provisions requiring providers and facilities to provide good faith estimate information for individuals enrolled in a health plan or coverage and seeking to submit a claim for scheduled items or services to their plan or coverage

New Deadlines and Future Enforcement

The following chart provides the requirements for group health plans, health insurers, and individual policies (provisions of the CAA also apply to grandfathered plans):

Notice or Disclosure Requirement

Provision

Applies to plan or policy years on or after:

New Enforcement Date

Public website
(TiC rule)
Public website disclosure of information related to in-network rates and out-of-network allowed amounts and billed charges (must also be provided in paper, if requested)

Publication of machine-readable files related to prescription drugs
January 1, 2022
July 1, 2022 – December 31, 2022
 
 
 
 
Years 2020 and 2021
July 1, 2022
As of the month the plan year begins
 
 
 
 
Deferred
Internet price comparison tool
(TiC rule)
Self-service health care tool for 500 of the most shoppable items and services, as indicated by the TiC January 1, 2023 January 1, 2023
Internet price comparison tool
(TiC rule)
Self-service health care tool for all covered items and services January 1, 2024 January 1, 2024
Comparison info via phone or website
(CAA law)
Price comparison information via phone and on plan or issuer’s website allowing individual to compare their actual amount of cost-sharing responsibility under the plan January 1, 2022 January 1, 2023
ID Card Information
(CAA law)
Plans and issuers must include in clear writing, on any physical or electronic plan or insurance identification (ID) card issued to participants, beneficiaries, or enrollees, any applicable deductibles, any applicable out-of-pocket maximum limitations, and a telephone number and website address for individuals to seek consumer assistance January 1, 2022 January 1, 2022
Good Faith Estimates
(CAA law)
Good faith estimates of expected charges for furnishing the scheduled item or service and any items or services reasonably expected to be provided in conjunction with those items and services, including those provided by another provider or facility, with the expected billing and diagnostic codes for these items and services January 1, 2022 January 1, 2022
(Uninsureds only)
(Estimates for uninsured pending future rulemaking)
Advanced Explanation of Benefits (EOB)
(CAA law)
Require plans and issuers, upon receiving a “good faith estimate” regarding an item or service to send a participant, beneficiary, or enrollee (through mail or electronic means, as requested by the participant, beneficiary, or enrollee) an Advanced Explanation of Benefits notification in clear and understandable language January 1, 2022 Pending future rulemaking
Prohibition on gag clauses
(CAA law)
Prohibits plans and issuers from entering into an agreement with a provider, network or association of providers, third-party administrator, or other service provider offering access to a network of providers that would directly or indirectly restrict the plan or issuer from:
  1. providing provider-specific cost or quality of care information or data to referring providers, the plan sponsor, participants, beneficiaries, or enrollees, or individuals eligible to become participants, beneficiaries, or enrollees of the plan or coverage;
  2. electronically accessing de-identified claims and encounter data for each participant, beneficiary, or enrollee; and 
  3. sharing such information, consistent with applicable privacy regulations
December 27, 2020 December 27, 2020
(Plan compliance attestations due in 2022 following forthcoming guidance from the Departments)
Provider Directories
(CAA law)
Establish standards related to provider directories that will protect participants, beneficiaries, and enrollees with benefits under a plan or coverage from surprise billing, e.g., process for network updates and verification, inquiry responses, etc. Make a publicly available post on a public website of the plan or issuer and include on each Explanation of Benefits for an item or service January 1, 2022 January 1, 2022
Continuity of Care
(CAA law)
Establish continuity of care provisions that protect participants when terminations of certain contractual relationships result in changes in provider or facility network status January 1, 2022 January 1, 2022
Reporting on pharmacy benefits and drug costs
(CAA law)
Reporting of prescription drug plan expenditures, including information regarding plan or coverage, number of participants, the 50 most frequently dispensed brand drugs, total paid claims for said drugs, impact of rebates on premiums and fees, etc. December 27, 2021 December 27, 2022

Future Rulemaking and Enforcement

The Departments commit to provide additional rules through the notice-and-comment rulemaking process, addressing the following areas:

  • appropriateness of the prescription drug machine-readable file requirements
  • whether compliance with the internet-based self-service tool requirements of the TiC Final Rules satisfies the analogous requirements under the CAA
  • requirements that the same pricing information that is available through the online tool or in paper form be available telephonically
  • how plans and issuers offering complex plan and coverage designs should represent information on an ID card (rules will not be issued prior to the effective date so plans and issuers are expected to use a good faith effort to comply)
  • production of good faith estimates including appropriate data transfer standards
  • implementation of provider directory requirements (rules will not be issued prior to the effective date so plans and issuers are expected to use a good faith effort to comply) NOTE: In the interim, plans and issuers who incorrectly communicate that an out-of-network provider is in the network can still avoid enforcement action if they impose a cost-sharing amount that is equal to or less than the in-network cost-sharing and counts cost-sharing amounts toward any deductible or out-of-pocket
  • continuity of care requirements (rules will not be issued prior to the effective date so plans and issuers are expected to use a good faith effort to comply)
  • pharmacy benefit and drug reporting requirements (Until regulations or further guidance is issued, the Departments strongly encourage plans and issuers to start working to ensure that they are in a position to be able to begin reporting the required information with respect to 2020 and 2021 data)
  • implementation guidance on how plans and issuers can submit their attestations of compliance with the prohibition on gag clauses

Next steps

Employers with fully insured group health plans should monitor the progress with their carriers and communicate availability to employees upon implementation of information and tools.

Employers with self-funded group health plans should begin, or continue, working with their third-party administrators or administrative service only (ASO) companies to understand what role they will take in helping to comply with these rules and how they can demonstrate good faith efforts where required. If using a third-party vendor, health plans will need to make sure written contracts lay out all responsibilities.

We will provide further information and updates upon the release of additional guidance and information. For more information on how to ensure your organization remains compliant, visit OneDigital's Compliance Confidence page.

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