Transparency Requirements and No Surprises Act Updates (Benefit Minute)
This issue of the Benefit Minute provides an update on the compliance deadlines for health plan cost transparency requirements under both the Consolidated Appropriations Act (CAA) and the cost transparency regulations, as well as a summary of regulations issued for the balance billing provisions of the No Surprises Act.
Compliance Deadlines – Cost Transparency
On August 20, 2021, the IRS, DOL and HHS issued FAQs that delay enforcement of many of the health plan and insurer cost transparency requirements, including:
- Machine readable files for in-network and out-of-network – this requirement still applies to plan years beginning in 2022, but enforcement will be delayed until July 1, 2022. For plan years beginning after July 1, 2022, files should be posted in the first month of the plan year
- Machine readable file for prescription drugs – the agencies will consider whether this requirement remains appropriate in light of other Rx reporting required by the CAA (see prescription drug reporting below)
- Advance cost estimate (provider responsibility) – HHS will defer enforcement of this requirement if an individual is enrolled in a health plan until final rules are issued
- Advance explanation of benefits (plan/insurer responsibility) – the agencies will defer enforcement of this requirement until data transfer standards between providers and plans/insurers can be established and final rules are issued
- Price comparison tool – enforcement will be deferred until plan years beginning on or after January 1, 2023 to align CAA requirements with the transparency regulations. The agencies encourage plans and insurers to continue to make existing tools accessible and work towards updating the tools to meet all transparency requirement
- Prescription drug reporting – the agencies will defer enforcement of this requirement for the first two deadlines (December 27, 2021 and June 1, 2022) pending issuance of regulations or further guidance. The agencies strongly encourage plans and insurers 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
The deadlines for required information on health ID cards, provider directory updates, prohibition on gag clauses on price/quality data, and continuity of care requirements when provider network status changes have not been delayed. Insurers and group health plans are expected to implement these requirements using a good faith interpretation of the law until any further guidance is issued.
Regulations Issued for No Surprises Act
The effective date of the balance billing protections under the No Surprises Act (NSA) has not been delayed. For plan years beginning on or after January 1, 2022, payers (including health insurers and self-insured group health plans) are prohibited from imposing a greater cost-sharing requirement for specific out-of-network services than would be imposed if the services were provided in-network, and providers are prohibited from balance billing for these services. NSA also implements a specific payment dispute resolution process between payers and providers.
These specific services are:
- emergency services by out-of-network providers/facilities
- certain non-emergency services by out-of-network providers at in-network facilities
- air ambulance services by out-of-network providers
Recently issued regulations broaden the definition of emergency services. Claim denials for emergency services cannot be based solely on diagnosis code and must instead be evaluated under the prudent layperson standard. In addition, payers cannot exclude benefits for items or services that would constitute benefits for an emergency medical condition based on a general plan exclusion applicable to items and services other than emergency services. Finally, post-stabilization services will generally be treated as emergency services unless the attending emergency physician determines the participant can travel using nonmedical or nonemergency transportation to a participating facility within a reasonable travel distance and certain notice and consent requirements are met.
The regulations also specify the amount that payers must use as the basis for participant cost-sharing. The recognized amount will be (in order of priority):
- an amount determined by an applicable All-Payer Model Agreement (such as for Maryland hospital services)
- if no such applicable All-Payer Model Agreement, an amount determined under specified state law (would generally be applicable to fully insured plans if a state has its own surprise billing law)
- if neither applies, the lesser of the billed charge or the qualifying payment amount (QPA)
The QPA is the median of the contracted rates recognized by the payer on January 31, 2019 for the same or similar item or service by a provider in the same or similar specialty and in the geographic region where the item or service is furnished, increased for inflation. The contracted rate is the total amount that a payer has contractually agreed to pay a participating provider or facility for covered items or services, whether directly or indirectly through a TPA or PBM. For self-insured plans, the QPA may be determined for all self-insured group health plans of the plan sponsor or, at the option of the plan sponsor, all self-insured group health plans administered by the same entity (Including a TPA) that is responsible for calculating the QPA on behalf of the plan.
The initial payment or denial of a claim covered under NSA must be made by the payer within 30 days of receipt of a clean claim. The payment amount will be determined by the All-Payer Model Agreement or the amount specified by state law, if applicable. Otherwise, the regulations do not stipulate an initial payment amount but state it must be an amount that the payer reasonably intends to be payment in full based on the relevant facts and circumstances and as required under the terms of the plan. If a provider is not satisfied with the initial payment amount, this starts the negotiation and dispute resolution process. Regardless of final payment amount, the participant’s cost-sharing responsibility is not impacted.
The regulations also impose disclosure requirements, including:
- notice and consent that a provider must obtain from a participant to allow balance billing for certain non-emergency services
- information payers must give to providers regarding the QPA and the dispute resolution process
- information payers must provide to participants about the surprise billing protections of NSA
Regulations defining the dispute resolution process between payers and providers have not yet been issued.