The Departments of Labor, Health and Human Services (HHS) and the Treasury (collectively, the Departments) released the Transparency in Coverage (TiC) Final Rules on November 12, 2020. The TiC Final Rules set forth requirements for group health plans (GHPs) and health insurance issuers in the individual and group markets to disclose cost-sharing information upon request to a participant, beneficiary, or enrollee. The Consolidated Appropriations Act, 2021 (CAA) became law on December 27, 2020. The year-end appropriations bill included ongoing relief and funds relating to the COVID-19 pandemic, permissible changes to Flexible Spending Accounts (FSAs) and Dependent Care Assistance Programs (DCAPs), a surprise billing prohibition and relaxed or amended rules affecting health plans. These rules set new requirements for health plans and issuers. On August 20, 2021, the Departments jointly released a set of frequently asked questions (FAQs) to answer rules-related inquiries submitted by interested stakeholders about provisions of the TiC and CAA. The Department FAQs provide information that helps covered entities understand the TiC and CAA requirements and promote compliance. The FAQs About Affordable Care Act (ACA) and CAA Implementation Part 49 also announced the delayed effective date for several of the TiC Final Rules and CAA healthcare transparency provisions.
The TiC Final Rules require GHPs to disclose certain cost information on a public website in a machine-readable format.
The TiC machine-readable file provisions are applicable for plan or policy years beginning on or after January 1, 2022. Under the TiC Final Rules, plans and issuers must make public machine-readable files disclosing in-network rates, out-of-network allowed amounts and billed charges. The TiC Final Rules also require plans and policies to publish negotiated rates and historical net prices for covered prescription drugs in three separate machine-readable files. These rules were established prior to the enactment of the CAA’s similar pricing transparency provision requirements which were set to become effective December 27, 2021.
To reduce confusion and duplicative reporting, the Department FAQs delayed and amended enforced deadlines relating to the requirements to publish machine-readable files.
The Departments chose to exercise their enforcement discretion to delay enforcing the publishing rules related to in-network rates, out-of-network allowed amounts and billed charges until July 1, 2022. The FAQs state the Departments reasoned that a considerable amount of time and effort is required for plans to create compliant machine-readable files with all of the required data and supports their decision to delay enforcement. In the FAQs, the Departments also state that they will defer enforcing the TiC Final Rule requirements relating to posting prescription drug prices until notice-and-rulemaking considerations occur. During this notice-and-comment rulemaking period, the Departments will consider whether the TiC Final Rules are necessary in light of the drug pricing posting requirements found in the CAA healthcare transparency rules.
The TiC Final Rules and the CAA also had provisions requiring plans to develop and post price comparison information available to plan participants, beneficiaries and enrollees.
Under the TiC Final Rules, plans must provide this information both on an internet-based, self-service tool (the price comparison tool) and in paper form at an individual’s request. The CAA requires the plan to provide price comparison information to individuals over the phone. According to the FAQs, the Departments plan to provide regulations that will either consolidate the requirement of both laws or state that satisfying the requirements of the TiC meets the requirements under the CAA. The regulations that the Departments plan to draft will also defer the enforcement date for providing the pricing transparency tool and information under both the TiC Final Rules and the CAA healthcare transparency provision to plan years that begin on or after January 1, 2023.
The Departments confirm that they will not release regulations on the new plan identification (ID) card disclosure requirements under the CAA before the January 1, 2022 effective date.
The CAA requires plans to include any applicable deductibles, out-of-pocket maximum limitations (OOPMs), telephone number and website address (URL) for plans on any physical and electronic participant ID cards. The Departments did not delay or defer the CAA ID card requirements for plans and insurers. Instead, the Departments gave plans and insurers instructions that they will not be out of compliance if they adopt a good faith, reasonable interpretation of the statute until the Departments adopt final regulations. As an example, the FAQs state that a plan will not be out of compliance if it includes the phone number, major medical deductible and OOPMs on its ID cards along with a QR code or URL that links to the plan website and information on any other plan deductibles and OOPMs. In the FAQs, the Departments said that they will engage in future rulemaking to provide further clarity on how plans can come into compliance with the CAA ID card requirements. The additional rulemaking and regulations will describe how plans and issuers offering complex plan and coverage designs should represent information on an ID card.
The CAA requires providers to furnish plans with a good faith estimate of expected charges, and then plans must provide plan participants and beneficiaries with an advanced explanation of benefits (EOB).
According to the FAQs, HHS will not issue regulations addressing the good faith estimate and EOB requirements prior to the statutory effective date of January 1, 2022. HHS states that the complexities involved with developing the standards and infrastructure for the data transfers required to transmit the necessary data mean it will need to delay the issuance of final regulations. The Department FAQs state that HHS will defer enforcement of the good faith estimate and EOB requirements until HHS issues its regulations.
The CAA prohibits GHPs from entering into agreements that preclude specified disclosures of provider-specific cost or quality-of-care information (gag clauses).
This provision of the CAA went into effect on December 27, 2020, the date the CAA was signed into law. The FAQs state that until the Departments issue guidance on how GHPs can meet the compliance requirements of the CAA, plans should implement the requirements prohibiting gag clauses using a good faith, reasonable interpretation of the CAA. Starting in 2022, plans and issuers will need to attest to compliance. According to the FAQs, the Departments will issue implementation guidance explaining how plans and issuers should submit their attestation of compliance and begin collecting those attestations in 2022.
The CAA established standards protecting patients and improving the accuracy of provider directory information available to participants, beneficiaries and enrollees.
The provider directory information provisions of the CAA are designed to help prevent participants, beneficiaries and enrollees from receiving surprise bills. Under the CAA provisions, plans and issuers must develop a process that updates and verifies the accuracy of its provider directory. They must also establish a protocol for responding to requests by telephone and electronic communication from a participant, beneficiary or enrollee about a provider’s network participation status. If provider directory information is inaccurate and results in an individual receiving services from a nonparticipating provider or facility that the directory listed as participating, there are certain limits placed on the plan. When a plan participant is inaccurately informed that an out-of-network provider or facility is an in-network provider or facility, the plan:
- Cannot impose a cost-sharing amount that is greater than the cost-sharing amount for an in-network provider or facility, and
- Must count those cost-sharing amounts toward any deductible or out-of-pocket maximum.
The Departments will not release any regulations or guidance before the January 1, 2022 effective date and will not delay the effective date. Consequently, the FAQs state that if plans implement the provider directory information using a good faith, reasonable interpretation of the statute (i.e., follow the requirements for inaccurate directory information) the Departments will consider the plan compliant until the release of further guidance and regulations.
The FAQs also state that plans should make a good faith, reasonable interpretation of the No Surprises Act provisions of CAA until the Departments release more regulations and guidance.
The FAQs state that the Departments plan to issue regulations and guidance on the parts of the No Surprises Act not addressed in the Part 1 July 2021 Interim Final Rules. Until the Departments release additional guidance, plans should implement the requirements using a good faith, reasonable interpretation of the No Surprises Act. The FAQs state that the Departments will consider the use of the model notice in accordance with the accompanying instructions to be good faith compliance with the disclosure requirements of the No Surprises Act.
The CAA provides a new continuity of care provision for when a provider is removed from a plan’s network following termination of the network contract between the plan and provider.
When such contract network terminations occur, the plan or insurer must timely notify plan participants receiving care from the provider that:
- The provider is no longer part of the plan’s network.
- The participant has the right to continue receiving transitional care from the provider.
- The plan must cover the transitional care provided by that former plan network provider at the in-network coverage level during the transitional care period.
The CAA requires plans to give the participant the opportunity to request a transitional care period. The period must extend for the remaining time that the participant is a patient at a continuing care facility or for up to 90 days after the plan participant(s) receives notification from the plan that the provider is no longer in their network. The Departments state that they likely will not engage in any rulemaking to implement the requirements until after the January 1, 2022 effective date. The Departments will not delay the provision’s effective date. Rather, until the Departments develop regulations to fully implement the continuity of care provisions, plans and insurers must implement the requirements using a good faith, reasonable interpretation of the statute.
In the FAQs, the Departments state that they intend to issue regulations addressing the CAA’s pharmacy benefit and drug cost reporting requirements but will defer enforcement.
The CAA updates the Employee Retirement Income Security Act (ERISA), the Public Health Service Act (PHSA) and the tax code to require each GHP to report certain information related to plan spending and prescription drugs to the Department secretaries before specific deadlines. The required data reporting includes:
- The plan year, number of enrollees and each state in which the plan is offered;
- Categorical data about the top 50 prescription drugs paid for by the plan. The required data disclosure includes:
- The top 50 brand prescription drugs paid for by the plan and the total number of paid claims for each of those drugs,
- The top 50 most expensive prescription drugs paid for by the plan and both the total annual spending and the annual amount spent by the plan for each drug,
- The 50 prescription drugs with the greatest increase in plan expenditures since the prior plan year and the change in amounts spent for each of those drugs
- The total spending on healthcare services by plan, broken down into specific categories, including (1) hospital costs, (2) primary care costs, (3) specialty care costs and (4) prescription drug costs;
- Reporting of the average monthly premiums paid by the employer and by the participants; and
- The impact on premiums by rebates and fees paid by the plan’s drug manufacturers, administrators or service providers, including reductions in premiums and out-of-pocket costs associated with the rebates and fees.
Until the Departments draft and release guidance or regulations, they will defer the first reporting deadline of December 27, 2021, and if necessary, the second enforcement deadline of June 1, 2022. The Department FAQs strongly encourage plans and insurers to start working to ensure they will be able to report 2020 and 2021 pharmacy benefit and drug cost data by December 27, 2022.
Plan sponsors should review the FAQs to familiarize themselves with the effective date deferrals and the good faith, reasonable interpretation examples relating to the CAA requirements for requirements that remain in effect starting January 1, 2022. Plan sponsors should contact their plan administrators to ensure that they can meet the various requirements. Plan sponsors, administrators and issuers should stay vigilant for Department releases of guidance and regulations concerning the provisions of the CAA.
Check out our related Compliance Matters alert, Health Plan Cost Transparency Update
EPIC offers this material for general information only. EPIC does not intend this material to be, nor may any person receiving this information construe or rely on this material as, tax or legal advice. The matters addressed in this document and any related discussions or correspondence should be reviewed and discussed with legal counsel prior to acting or relying on these materials.
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Compliance Manager – Atlanta, GA