You may have heard something about new transparency requirements that are going into effect soon for health plans. This briefing will outline those various legal requirements and the impact on your group health plans. We have blogged about this several times over the past year or so as information has progressed but this article will serve as a way to further delve into the implementation of these new requirements, as rules continue to be clarified and finalized in the coming months.
Two federal laws that have been finalized in the last year require greater transparency regarding the cost of certain prescription drugs and medical services.
1. The Transparency in Coverage Final Rule
On October 29, 2020, the U.S. Departments of Health and Human Services, Labor and the Treasury (together, the Departments) issued a final rule under the Patient Protection and Affordable Care Act (PPACA) and in furtherance of an executive order issued in 2019. This rule, entitled Transparency in Coverage, requires group health insurance carriers and self-insured plans to disclose rates and cost-sharing information for all covered items and services. The rule does not apply to Medicare, Medicaid, grandfathered health plans, standalone vision or dental plans, short-term limited duration plans, HRAs, FSAs or HSAs.
The disclosure obligations set forth in the rule are phased in over three years.
Effective January 1, 2022, group health carriers and self-insured plans must publicly disclose the following in three machine-readable files: (1) in-network provider negotiated rates, (2) out-of-network allowed amounts and billed charges, and (3) prescription drug negotiated rates and historical net pricing. These files must be posted prominently on a public website and be freely accessible. The files must be updated at least monthly thereafter.
Effective January 1, 2023, group health carriers and self-insured plans must provide cost-sharing information for 500 “shoppable services” (non-emergent services, which are to be defined by the Centers for Medicare and Medicaid Services CMS, that can be scheduled in advance such that a member can price-shop) to customers online. Papers copies must be made available upon request.
Effective January 1, 2024, the online cost-sharing information must include all covered items and services.
As 2020 drew to a close, Congress passed an omnibus spending measure which included a number of transparency provisions, including those set forth in the No Surprises Act.
Effective December 27, 2021 and no later than June 1 of each year thereafter, carriers and self-funded plans must submit to the Departments
certain information with respect to the plan or coverage for the previous plan year, including with respect to prescription drugs:
On June 23, 2021, the Departments issued a Request for Information on these CAA rules and is expected to issue proposed regulations by the end of the summer.
Effective January 1, 2022, the No Surprises Act requires the following of self-funded and fully insured health plans as pertains to transparency.
These rules do not apply to pharmaceutical carve-out plans, as they are aimed at transparency in pricing regarding treatment at health care
As of the time of this writing, the Departments are still in the process of seeking comment on the Transparency in Coverage rule and have just closed the comment period for the CAA Request for Information. Considering the administrative burdens these rules impose on plans, calls have been made for longer phase-in periods. In the meantime, we are in the process of seeking assurance from carriers for fully insured plans that they will be able to comply with these mandates on the timeframes set by the Departments. For our self-insured group health and pharmacy carve-out clients, we are gathering information from likely service providers. As regulations are finalized, we will be able to provide more information as to how we will be helping our self-funded clients to obtain the services that will be required under the new laws.
· 7/21/2021 – No Surprises Act: Interim Final Rule Released
· 7/8/2021 - Q2 Newsletter Entry - New and Upcoming Cost Transparency Rules
· 11/5/2020 – HHS Completes Historic Price Transparency Initiative
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