Transparency in Coverage – New Group Health Plan Compliance Deadlines
August 27, 2021
There are several major health cost transparency requirements and data obligations starting in 2022 that will affect employers that offer group health plan (GHP) coverage to their employees. The new rules are intended to protect consumers and to create new federal standards designed to provide participants with health pricing information necessary to make informed decisions. These rules are designed to complement the hospital pricing transparency rule that took effect earlier this year. GHP sponsors must begin to prepare now as it is the GHP fiduciaries that must ultimately ensure compliance with the new transparency requirements. Most GHP sponsors will need to rely on third parties to implement many of the data and pricing transparency measures required by the rules.
Implementing Laws
The Transparency in Coverage Rule begins to take effect in 2022. This rule will require GHPs and issuers to disclose personalized price and cost-sharing information to consumers. The No Surprises Act and its many transparency and disclosure requirements take effect beginning in 2021 and 2022.
Deferred Enforcement of Some Requirements
Given the fast approaching implementation deadlines, the agencies issued frequently asked questions (FAQs) regarding the implementation of the rules and announced that many of the requirements are delayed, with some requirements delayed indefinitely until further guidance is provided. However, there are a few requirements that will go into effect in 2022 as originally indicated. Several rounds of additional guidance are promised and we will continue to report on developments as they become available. The revised deadlines and requirements as noted in the FAQs are addressed below.
Machine Readable Public Pricing Disclosures. The implementing law requires each non-grandfathered GHP sponsor and fully insured carrier to make machine-readable files publicly available online (posted to a website) as of July 1, 2022 (extended from January 1, 2022) and to maintain them monthly moving forward. This means plan years beginning between January 1, 2022 and July 1, 2022 need to comply by July 1, 2022, and plans years that begin after July 1, 2022 need to comply by the first month of the plan year. The files need to contain payment rates negotiated between plans or issuers and providers for all in-network covered items and services, and historical out-of-network allowed amounts and billed charges. The rules also required that plans publish machine-readable files related to prescription drug pricing, but this rule is delayed indefinitely until further guidance is provided.
Price Comparison Self-Service Tool. Most non-grandfathered GHP sponsors and fully-insured carriers are required to provide personalized cost-sharing information (in the form of seven content-specific elements) through an internet-based self-service tool (to be updated monthly) and in paper form upon request, as well as by telephone. The tool would provide information to participants about cost-sharing for items and services obtained in-network as well as the allowed amounts for the same items and services obtained out-of-network. An initial list of 500 shoppable services will be required for plan years beginning on or after January 1, 2023. The remainder of all items and services will be required for plan years beginning on or after January 1, 2024. The rules are intended to allow easy comparison shopping and to ensure consumers are empowered with the critical information they need to make informed health care decisions. The rule builds upon previous actions taken to increase price transparency by giving patients access to certain hospital pricing information, including standard charges and negotiated rates with third-party payers.
Advance Explanation of Benefits. The rules originally required that when individuals with health insurance request items or services from a provider, the provider was required to send a good faith estimate of the expected charges, along with the billing and diagnostic codes, to the individual’s plan. Plans that received an advance good faith estimate from the provider were then required to provide an advanced explanation of benefits (EOBs) to the individual. These requirements were to go into effective for plan years beginning in 2022. However, the requirements for a provider to send a good faith estimate to the individual’s plan and then for the plan to provide an advanced EOB to the participant are now delayed indefinitely until further guidance is provided.
Surprise Billing. The implementing laws also operate to prohibit the balance billing of plan participants for out-of-network emergency room services and out-of-network ancillary services performed at in-network facilities, and establishes a dispute resolution mechanism if a payer and a provider are unable to agree on the pricing for out-of-network services governed by the law. Effective for plan years beginning in 2022, a plan must make information available on its public website and on any explanation of benefits (EOBs) outlining the new balance billing limitations that apply for out-of-network emergency services, out-of-network air ambulance services, and certain non-emergency services furnished by out-of-network provider at in-network facilities. There will be additional guidance from the agencies on these requirements, but in the meantime, plans should include a disclosure similar to the model notice that has been provided on a public website and on all EOBs.
Pharmacy and Prescription Drug Reporting. GHPs were required to report certain information regarding prescription drug and other health care costs to the agencies by December 27, 2021, with annual reporting required by June 1 for each year thereafter, beginning 2022. This reporting requirement is intended now to be effective December 27, 2022 (pending further rulemaking and guidance). There will be additional guidance from the agencies on these requirements, but in the meantime, they will defer enforcement pending the issuance of further guidance. This means that reporting will not be due December 2021 or June 2022 but that GHPs should begin to prepare to report by December 27, 2022.
Insurance ID Card. Effective for plan years beginning in 2022, insurance identification (ID) cards must state the plan deductible and maximum out of pocket (OOP) costs, and must provide a phone number and website address for further assistance. Further guidance will likely be provided, but in the meantime, plans are expected to use a good faith, reasonable interpretation of the requirements.
Provider Directory Information. For plan years beginning in 2022, accurate provider directory information must be available online and by telephone. Such information is required to be verified and updated at least every 90 days. If an individual is provided inaccurate information by the provider directory stating that the provider or facility was a participating provider or facility, the plan may apply cost-sharing only equal to or less than it would for a participating provider or facility and must count such cost-sharing amounts toward any in-network deductible or maximum OOP cost. The agencies plan to issue regulations after January 1, 2022 on the provider directory requirement, and until then, plans are expected to use good faith, reasonable interpretations of the requirement.
Continuity of Care. For plan years beginning in 2022, when a provider or facility is no longer in-network or covered, participants must be permitted to elect continuing care for up to 90 days from that provider or facility under the same terms and conditions that were in place prior to the change in network or coverage. The agencies plan to issue regulations after January 1, 2022 on the provider directory requirement, and until then, plans are expected to use good faith, reasonable interpretations of the requirement.
Gag Clauses. Beginning in December 2020, plans were prohibited from entering any agreement with a provider or third party that restricts the plan from disclosing price or quality of care information. The agencies do not expect to issue regulations on the general gag clause requirements, and plans are expected to use good faith, reasonable interpretations of the requirements. Beginning in 2022, plans must attest to compliance with this requirement and the agencies have promised further guidance on this attestation process.
Other provisions from the implementing laws are effective this year including the comparative analyses requirement for Mental Health Parity and Addiction Equity Act and the new covered service provider compensation rules.
Fully insured carriers are responsible for producing the cost estimates and data needed for fully insured plans, but employers offering any self-insured plans will need to work with their TPA or other service provider to access the data and cost information needed to meet the various requirements. Potential short-term increases in administrative costs are therefore likely. Plan sponsors will need to review various agreements, plan documents, and draft disclosures well in advance of effective compliance deadlines.
To keep you up to date on the new rules, Conner Strong is hosting a webinar on Wednesday, September 22 from 2pm – 3pm: “What You Need to Know – Price Transparency, Surprise Medical Bills, COBRA, Vaccine Incentives, and More.” Click the button below to register.
Should you have questions regarding the transparency rules or any other area of compliance, please contact your Conner Strong & Buckelew account representative toll free at 1-877-861-3220.
