The Biden administration has delayed enforcement of key parts the insurer price transparency rule by six months (until July 1, 2022), to give plans more time to comply, while other components will take effect on the intended effective date. Employers should refer to The Center for Medicare Services’ (CMS) published guidance which details the enforcement dates of certain payer price transparency requirements in both the Transparency in Coverage final rule and the Consolidated Appropriations Act (CAA).
Brief History of Legislation. In December 2020, Congress passed the CAA, which was a spending bill that included among other things, the No Surprises Act (Act) which is intended to protect patients from receiving surprise medical bills. The Act created requirements for:
- Advanced explanations of benefits (EOBs) which provide good faith estimates of the out-of-pocket costs for scheduled medical services.
- A price comparison tool to enable participants to compare cost-sharing amounts for specific network providers.
- Drug cost information to have been reported to the federal regulators.
- Public pricing disclosures related to in-network rates, out-of-network allowed costs and prescription drug prices.
Many of the requirements such as health plan price transparency provisions, reporting, disclosure, and other patient protections were set to take effect either at the end of December 2021 or on January 1, 2022. The frequently asked questions (FAQ) guidance, issued on August 20, 2021, by the U.S. Department of Labor (DOL), U.S. Department of Health and Human Services (HHS), and U.S. Department of the Treasury, also provides some relief and/or clarification related to other key health benefit compliance items. As a result of the guidance, the following provisions under the Act are delayed via deferred enforcement or are confirmed to be in effect on the original effective date:
Advance Explanation of Benefits (EOB) Requirements. Under the Act, plans are required to provide plan participants with good faith estimates of expected provider charges whenever they schedule a specific health care service. All providers and facilities must inquire whether a participant has health insurance no later than one business day after the medical appointment is made (if made at least three business days in advance) or no later than three business days after the medical appointment is made (if made at least 10 business days in advance).
Insured participants must be provided with a good faith cost estimate including billing and diagnostic codes to the plan sponsor. Once notified, the plan sponsor must provide the participant with an EOB no later than one business day after receiving the notification (if the appointment was made at least three business days in advance) or no later than three business days after receiving the notification (if the appointment was made at least 10 business days in advance). The EOB must also include the following:
- The network status (in-network or out of network) of each provider and facility.
- If the provider or facility is in-network, the contracted rate for the services scheduled to be received.
- If the provider or facility is out-of-network, the good faith estimate supplied to the plan sponsor.
- The expected participant cost-sharing amount.
- The estimated amount the participant has accrued toward their annual deductible and annual out-of-pocket maximum.
- Any medical management requirements for procedures, such as prior authorizations.
- A disclaimer that all information is estimated and is subject to change.
This was initially set to take effect January 1, 2022, but the frequently asked questions (FAQ) guidance indicates that the agencies will defer enforcement until regulations are issued on these plan disclosures and the disclosures required by medical providers. (Refer to question 6.)
Price Comparison Tool. Under the Act, plans are required to offer online tools and phone support to enable participants to compare. The tool must include out-of-pocket cost comparisons for various services by an in-network provider or facility for a specific geographic region and plan year. Initially set to take effect on January 1, 2022, the guidance delays the effective date of this requirement to January 1, 2023. (Refer to questions 1-3.)
Drug Cost Reporting. Employer plans are required to report very detailed prescription drug cost information to the agencies, including the 50 most commonly covered drugs per plan, the 50 most expensive drugs per plan, and the total health spending for each plan broken out into specific categories. The initial reports were to be provided to the agencies by December 27, 2021, and then by June 1, 2022. The agencies will defer enforcement related to the 2021 and 2022 reports until they issue further guidance, though the agencies “strongly encourage plans” to get ready to report 2020 and 2021 plan year data no later than December 27, 2022. (Refer to question 12.)
Insurance Cards. Under the Act, plans have to update physical or electronic insurance cards to include network and out-of-network deductibles and out-of-pocket limits and a telephone number and internet website which provides participants assistance with this information. This is set to take effect on January 1, 2022 and has not been changed or delayed by the guidance. However, the guidance clarifies that the agencies will consider both data actually on the cards and data “made available through information that is provided on the ID card.” (Refer to question 4.)
Continuity of Care. If a participant is receiving continued care for an ongoing medical condition from a specific in-network provider or facility and that provider or network contract changes to out of network, plans have to take steps to protect hospitalized or other continuing care patients by allowing participants to continue to receive care from the provider at the in-network cost-sharing amount for 90 days. This requirement will take effect on January 1, 2022. The guidance clarifies that the agencies intend to issue formal regulations on this requirement but will not do so before the effective date. Until regulations take effect, plans will be held to a good-faith compliance standard. (Refer to Question 10.)
Provider Directories. Plans must establish a provider database on a public website that includes a list of all healthcare providers and facilities under contract. Plan sponsors must verify provider information in the database at least every 90 days and establish a process to remove providers when it cannot verify their information and more promptly notify participants about whether a particular provider is in-network. If a plan sponsor provides inaccurate information to a participant about the network status of a provider or facility, and the participant receives services from that provider or facility, then the participant is only responsible for paying the in-network cost-sharing amount. These requirements will take effect on January 1, 2022 and have not been changed by the guidance. The agencies do indicate that they intend to issue formal regulations in the future and may also have specific additional guidance on required disclosure of balance billing information. (Refer to questions 8 and 9.)
Next Steps for Employers
Determining your health plan status under the ACA may be a key factor in compliance. Plan sponsors with grandfathered status are relieved of having to comply with the new consumer protection and transparency provisions required of non-grandfathered plans, such as pharmacy and drug cost reporting, whereas the advanced EOB requirements apply regardless of a plan’s status as a grandfathered plan. Grandfathered plans must have been in place before the ACA was signed into law on March 23, 2010, and since then, must not have made any changes that would cause them to lose their grandfathered status.
Plan sponsors may need to pay to issue new ID cards if the required information is not already printed on them. Every time the deductible or out-of-pocket maximum changes, the plan sponsor must issue new ID cards.
Plan sponsors will likely pay administrative costs to develop and maintain a price comparison tool. However, this information might help participants find the least costly provider, which could potentially reduce plan costs.
Provider directories are common among medical insurance carriers and provider network suppliers, but because the meticulousness in maintaining them has not been uniform across the industry, this part of the legislation may require more oversight on part of plan sponsors to ensure that the information is accurate and updated on a timely basis.
Employers should prepare to begin working with their carriers and/or third-party administrators on compliance efforts.