FAQs Address Implementation of Group Health Plan Transparency Requirements

 

On August 20, 2021, the DOL, HHS and the Treasury jointly released FAQs regarding implementation of requirements under the Transparency in Coverage (the TiC) final rule and provisions of the Consolidated Appropriations Act of 2021 (the CAA), including the No Surprises Act. Importantly, the FAQs provide an update on the enforcement dates of provisions under these laws pending the issuance of regulatory guidance.

The TiC final rule was issued in 2020 and requires non-grandfathered group health plans to disclose in-network provider negotiated rates, historical out-of-network allowed amounts, and prescription drug pricing information to the public via machine-readable files posted to a website. Additionally, these plans must provide participants with personalized cost-sharing information for covered services via an online self-service tool. The rule includes phased-in effective dates from January 2022 through January 2024.

Subsequently, Congress passed the CAA in December 2020. This budgetary measure includes various provisions to address surprise billing and price transparency in the group health plan context. However, some of the CAA requirements duplicate the TiC requirements, but have different effective dates.

The FAQs address the overlapping TiC and CAA provisions. The guidance also sets expectations regarding the timing of implementing regulations and plan compliance in the interim.

Specifically, FAQs #1 and #2 focus upon the TiC machine-readable file requirements. Under the new guidance, the enforcement date for public posting of a plan’s in-network rates and out-of-network allowed amounts is extended from January 1, 2022, to July 1, 2022. The posting of the TiC prescription drug pricing file is deferred indefinitely pending a determination, through notice and comment rulemaking, of whether it remains necessary. (The CAA pharmacy benefit reporting provisions require plans to report some of the same prescription drug information to regulators.)

FAQ #3 speaks to the overlapping price comparison tool requirements under the TiC and CAA. Under the TiC, plans must make price comparison and cost sharing information available to participants through an internet-based self-service tool and in paper form, upon request. This requirement applies to 500 common items and services effective for plan years beginning on or after January 1, 2023, and for all items and services commencing for plan years beginning on or after January 1, 2024. The CAA requires plans to provide similar price comparison guidance by internet and phone for plan years beginning on or after January 1, 2022. The new guidance indicates that regulators intend to propose rules and seek comments as to whether compliance with the TiC pricing requirements, with the addition of fulfilling participant requests made by phone, would also satisfy the CAA requirements. Furthermore, the guidance indicates that enforcement of the CAA self-service tool requirement is postponed until plan years beginning on or after January 1, 2023, to align with the TiC effective date.

FAQ #4 explains that the CAA requirement for plans to issue updated physical or electronic insurance identification cards remains effective for plan years beginning on or after January 1, 2022. The new cards issued to enrollees must reflect cost-sharing information, including applicable deductibles, out-of-pocket maximum limitations, and a telephone number and website address for assistance. Regulatory guidance will likely not be issued until after the effective date, so plans are expected to implement the ID card requirements using a good faith, reasonable interpretation of the law in the interim.

According to FAQs #5 and #6, enforcement of the CAA provisions that require plans to provide participants with good faith cost estimates of scheduled services or advance explanations of benefits are delayed pending the issuance of regulatory guidance. Such guidance is not anticipated prior to the January 1, 2022 effective dates.

FAQ #7 confirms that the CAA prohibition against gag clauses took effect upon the law’s enactment on December 27, 2020. As a result, plans must ensure that contract provisions regarding provider networks do not directly or indirectly restrict them from accessing cost and quality of care information and providing the information to participants or from electronically accessing de-identified participant claims data. The regulators intend to issue guidance to explain how plans should submit their attestations of compliance with this prohibition and anticipate beginning to collect such attestations starting in 2022.

FAQ #8 indicates that regulatory guidance on the CAA provider directory provisions will likely not be issued prior to the January 1, 2022, effective date. These provisions generally require plans to establish a process to update and verify the accuracy of provider directory information and respond to participant requests about a provider’s network participation status. Pending guidance, plans are expected to comply in good faith and would be deemed in compliance provided that any participants given inaccurate information about a provider’s network status are assessed only the in-network rates.

FAQ #9 explains that regulations addressing the CAA balance billing disclosure requirements will not be issued prior to the January 1, 2022, effective date. Until further guidance is issued, use of the model disclosure notice provided with the July 2021 Interim Final Rules on Surprise Billing will be considered good faith compliance, if all other applicable requirements are met.

Similarly, FAQ #10 indicates that guidance will not be issued regarding the CAA continuity of care provisions before the January 1, 2022, effective date. These provisions are designed to protect participants undergoing care for certain conditions and serious illnesses from unanticipated in-network provider terminations by the plan. Plans must comply in good faith in the interim.

FAQ #11 clarifies that although ACA grandfathered plans are exempt from the TiC requirements, these plans are subject to the transparency and No Surprises Act provisions of the CAA.

Finally, FAQ #12 provides that enforcement of the CAA pharmacy benefit reporting requirements will be deferred from December 27, 2021, to December 27, 2022, pending the issuance of regulations. However, plans are encouraged to start working to ensure they are in a position to report the required information with respect to 2020 and 2021 data by December 27, 2022.

Employers who sponsor group health plans should be aware of this important regulatory update. They should continue to work with their counsel and service providers to ensure compliance with the TiC and CAA provisions by the applicable enforcement dates.

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