Are You Ready for Health Care Transparency? By Jonathan Alexander, VP, WGAT & PCMI Compliance – Program Manager CC, Compliance In October 2020, the Departments of Health and Human Services, Labor and Treasury (the “Departments”) released the Transparency in Coverage Final Rules (TIC) to require health plans to provide greater cost transparency. Two months later, the Consolidated Appropriations Act of 2021 (CAA) was signed into law, representing the most significant changes to the private insurance market since the Affordable Care Act. The CAA includes extensive transparency reforms, including some that overlap with TIC, but with more aggressive deadlines, and extends consumer healthcare provisions to grandfathered health plans.
Advanced Explanation of Benefits Health plans must provide patients with an advanced explanation of benefits (EOB) for services for which the plan has received advanced notice, such as requests for pre-authorization. The advanced EOB must be provided no later than one business day following receipt of the advanced notice (three business days, if the notice was received at least 10 business days before the service is scheduled to be furnished), and must include: • Status of the provider or facility as in- or out- of-network. If the provider is within the plan’s network, the contracted rate for the service must be provided; if the provider is out-of-network, the plan must provide a description of how to obtain information about network providers. • The estimate included in the notice received from the provider or facility. • Good faith estimates of: – the amount the plan is responsible for paying, – any cost sharing for which the participant will be responsible; and – the amount the participant has incurred toward meeting the annual deductible or out- of-pocket maximum. • A disclaimer that the service is subject to medical management, if applicable. • A disclaimer that the information provide is only an estimate and is subject to change. • Any other information deemed appropriate by the plan. Gag Clause Prohibition Gag clauses (contract provisions that restrict or prevent insurers from disclosing price or quality information to members) are prohibited in all new or renewing contracts. ID Card Requirements Plans are required to provide the following information on their health plan identification cards: • The amount of in-network and out-of-network deductibles; • The in- and out-of-network out-of-pocket maximum limitations; and • A telephone number and website address for additional assistance.
The new regulations are generally considered good for consumers, requiring health plans and health care providers to furnish additional information to allow consumers to make good health care choices. The new compliance requirements, however, impose a substantial administrative burden for insurance carriers, multiple employer welfare arrangements (e.g., Western Growers Assurance Trust), third party administrators (e.g., Pinnacle Claims Management, Inc.) and employers who sponsor self-insured health plans. Although employers who offer a self-insured plan typically contract with a third party administrator to manage their health plans, it is ultimately the self-insured employer—not the third party administrator—that is responsible for compliance with transparency requirements. A brief description of the significant provisions of the TIC and CAA follow. Unless otherwise indicated, the changes are effective with plan years beginning on and after Jan. 1, 2022. Machine-Readable Files Effective July 1, 2022, health plans are required to disclose, on a public website, two machine-readable files showing (i) in-network provider rates for covered items and services, and (ii) out-of-network allowed amounts and billed charges for covered items and services. Implementation of a third file, showing negotiated rates and historical net prices for prescription drugs, has been postponed pending further regulatory guidance. Price Comparison/Cost Transparency Tool TIC requires health plans to make price comparison information available, giving consumers the ability to compare costs for various providers. The information must be available for 500 common items and services beginning on or after Jan. 1, 2023, and for all services effective Jan. 1, 2024. Information must be available through a web-based self-service tool, over the telephone or, upon request, by mail. The CAA also contains a cost transparency requirement, but the Jan. 1, 2022, effective date has been delayed pending further guidance from the Departments.
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MAY | JUNE 2022
Western Grower & Shipper | www.wga.com
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