If You Have Been Racing To Meet These Deadlines… You May Have Just Gotten An Extension - Healthcare

Seyfarth Synopsis: The Departments of Labor, Health and Human Services, and Treasury (the "Departments") have issued FAQs which address certain provisions of the Affordable Care Act (ACA) and Title I (No Surprises Act) and Title II (Transparency requirements) of the Consolidated Appropriations Act of 2021 (CAA). The FAQs provide welcome relief for group health plans as they postpone many compliance deadlines and allow for some breathing room.

The ACA requires "transparency in coverage" cost-sharing disclosures by most health plans. In November of 2020, the Departments issued Final Transparency in Coverage Rules (TiC Rules) which require group health plans and health insurance issuers to disclose cost-sharing information to participants, beneficiaries, and, in some cases, the public. See our legal update here. The CAA also includes Transparency requirements, some of which overlap with the TiC Rules.

The No Surprises Act protects plan participants from surprise medical bills for services provided by out-of-network or nonparticipating providers and facilities. The No Surprises Act also contains extensive provisions regarding reporting and disclosure of charges and benefits. The first round of guidance on the surprise billing requirements was issued in July, 2021 (see our legal update here).

The FAQs address some of the guidance expected under the TiC Rules and the CAA, and announce that no further guidance will be issued for certain provisions. This legal update addresses what requirements will apply to group health plans, and when.

Machine-Readable Files

For plan years beginning on or after January 1, 2022, the TiC Rules require plans to disclose on a public website information regarding in-network provider rates for covered items and services, out-of-network allowed amounts and billed charges for covered items and services, and negotiated rates and historical net prices for covered prescription drugs in three separate machine-readable files. (According to the preamble to the TiC Rules, this will allow the public to have access to health coverage information that can be used to understand pricing and potentially dampen the rise in health care spending.)

FAQ Takeaways - According to the FAQs, the Departments will enforce the machine-readable file provisions in the TiC Rules, subject to two exceptions.

The requirement that plans publish machine-readable files relating to prescription drug pricing is deferred pending further rulemaking to determine if these requirements remain appropriate.
The requirement to publish in-network rates and out-of-network allowable amounts and billed charges is deferred until July 1, 2022. The FAQs state, however, that on July 1, 2022, the Departments will begin enforcing the requirement that plans publicly disclose information for plan years beginning on or after January 1, 2022.

Price Comparison Tools

Both the TiC Rules and the CAA require plans to create an internet-based self-service tool to disclose cost-sharing information to participants. The TiC Rules require a plan to provide cost-sharing information for a covered item or service: (i) by billing code or description, and/or (ii) in connection with an in-network provider, or an out-of-network allowed amount for a covered item or service provided by an out-of-network provider. The CAA's price comparison is mostly repetitive of the TiC Rules, but it added the requirement that this information must also be provided over the telephone, if requested. The TiC Rules' effective date is January 1, 2023 with respect to 500 items and services listed in the preamble to the TiC Rules, and January 1, 2024 with respect to all covered items and services. The CAA's effective date is January 1, 2022.

FAQ Takeaways - The Departments will:

Propose rulemaking and seek public comment to determine if the internet-based self-service tool requirements of the TiC Rules satisfy the requirements under the CAA.
Propose rulemaking to require that the pricing information required under the TiC Rules must also be provided over the telephone if requested.
Defer enforcement of the requirement to provide a price comparison tool until January 1, 2023. Until that time, the Departments will focus on compliance assistance.

Plan or Insurance Identification Cards

The No Surprises Act requires plans to include, in clear writing, on physical or electronic insurance identification (ID) cards, any applicable deductibles and out of pocket maximum limitations, and a telephone number and website address for individuals to seek consumer assistance. This requirement is effective January 1, 2022.

FAQ Takeaways - The Departments:

Do not intend to issue regulations addressing the ID card requirements before the effective date. Instead, plans are expected to make a good faith interpretation of the law to reasonably design the ID cards to provide the required information.
When analyzing a plan's compliance efforts, the Departments will consider whether the ID cards are reasonably designed and implemented to provide the required information to all participants, beneficiaries, and enrollees.

Good Faith Estimate of Expected Charges

The No Surprises Act requires providers and facilities, upon an individual's scheduling of items or services, or upon request, to provide a notification of a good faith estimate of the 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. If the individual is enrolled in a health plan and is seeking to have a claim submitted to the plan, the provider must provide this notification to the plan. Otherwise, the notification must be provided to the individual.

The effective date is January 1, 2022. Because uninsured individuals do not have the claims and appeals processes in place to protect them as do individuals covered by a group health plan, with respect to uninsured individuals, HHS intends on enforcing the good faith requirements beginning January 1, 2022 and issuing regulations prior to January 1, 2022.

FAQ Takeaways - The Departments will:

Defer enforcement for individuals enrolled in a health plan until future rulemaking is issued.
Issue regulations implementing good faith estimate requirements for uninsured individuals prior to January 1, 2022.

Advanced Explanations of Benefits

The No Surprises Act requires that plans, upon receiving a good faith estimate, provide participants with an Advanced Explanation of Benefits (the "AEOB") in clear and understandable language. The AEOB must include whether the provider or facility is in-network; the contracted rate for the item or service, or an explanation as to how the individual can obtain information on participating providers; the good faith estimate received from the provider; an estimate of what the plan will pay and the participant's cost-sharing obligation; and whether any medical management techniques apply. The statutory effective date is January 1, 2022.

FAQ Takeaway - The Departments intend to undertake notice and comment rulemaking in the future to establish appropriate data transfer standards between plans and providers to implement the AEOB requirement. In the meantime, the Departments will not enforce the requirement.

Prohibition on Gag Clauses

Effective December 27, 2020, the Transparency requirements of the CAA prohibit plans from entering into an agreement that would restrict the plan from accessing or sharing certain information with a provider, network of providers, third-party administrator, or other service provider offering access to a network. Specifically, an agreement cannot restrict a plan from: (i) providing provider-specific cost or quality of care information to referring providers, the plan sponsor, participants and beneficiaries, or individuals eligible for coverage; (ii) electronically accessing certain de-identified claims information for each participant; or (iii) sharing such information with a HIPAA business associate.

FAQ Takeaway - The Departments will not be issuing regulations and expect plans to implement the requirements using a good faith, reasonable interpretation. The Departments will begin collecting attestations of compliance in 2022 and intend on issuing guidance to explain how plans should submit their attestations.

Provider Directories

The No Surprises Act requires plans to establish a process to update and verify the accuracy of provider directory information and to 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. Under a correction method provided, if a participant is provided with incorrect information that a provider is in-network and a service or item is provided by a nonparticipating provider, then the plan cannot impose a cost-sharing amount that is greater than the cost-sharing amount that would be imposed for items and services furnished by a participating provider and the plan must count cost-sharing amounts toward any in-network deductible or in-network out-of-pocket maximum. The effective date is January 1, 2022.

FAQ Takeaways - The Departments will not:

Issue regulations until after January 1, 2022. Until then, plans are expected to implement these provisions using good faith, reasonable interpretation of the law.
Deem a plan out of compliance, provided the correction method is used.

Balance Billing Disclosures

The No Surprises Act requires plans to make publicly available, post on a public website of the plan and include on each explanation of benefits (EOB) for an item or service information on the prohibitions on balance billing. The disclosure provisions are effective January 1, 2022.

FAQ Takeaways - The guidance states:

The Departments may provide guidance in the future. Until then, plans are expected to implement these requirements using a good faith, reasonable interpretation of the law.
A model notice that may be used to satisfy the disclosure requirements is available on the CMS website. (See here)

Continuity of Care

The No Surprises Act ensures that participants won't lose coverage when changes in provider or facility network status occur. These provisions are effective January 1, 2022.

FAQ Takeaway - The FAQs state that the Departments expect to issue further guidance to fully implement these provisions and provide a new, prospective effective date. Until then, plans are to implement the requirements using a good faith, reasonable interpretation of the law.

Grandfathered Health Plans

The FAQs provide that the CAA does not include an exception for grandfathered health plans.

Reporting on Pharmacy Benefits and Drug Costs

The Transparency requirements of the CAA require that by December 27, 2021, and by each June 1st thereafter, plans submit relevant information to the Departments regarding plan coverage for prescription drugs. This includes, but is not limited to, a list of the 50 most frequently dispensed brand prescription drugs, and the total number of paid claims for each such drug; the 50 most costly prescription drugs by total annual spending, and the annual amount spent by the plan for each such drug; and the 50 prescription drugs with the greatest increase in plan expenditures over the plan year preceding the plan year that is the subject of the report, and, for each such drug, the change in amounts expended by the plan or coverage in each such plan year.

Additionally, plans must report (i) total spending on health care broken down by type of costs (i.e. hospital, provider costs for primary care and specialty care, costs for prescription drugs and other medical costs), and spending on drugs by the plan and participants; (ii) average monthly premium paid by employer and employee; (iii) any impact on premiums by rebates, fees and other amounts paid by drug manufacturers to the plan; and (iv) any reduction in premiums and out-of-pocket costs associated with rebates, fees, and other amounts paid by drug manufacturers.