The healthcare industry is in a state of constant evolution, introducing new legislation, requirements, and standards throughout the year. On the horizon for many employers and health benefits managers are a set of new transparently requirements that will be going into effect in the upcoming years. In this blog, we will outline the legal requirements of these transparency efforts and detail the impact they will have on your group health plans.
The Transparency in Coverage Final Rule
On October 29, 2020, the Departments of Health and Human Services , Labor, and the Treasury issued the Transparency in Coverage final rule. The Transparency in Coverage rule requires that group health insurance carriers and self-insured plans disclosed their rates and cost-sharing information for all covered items and services. The rule does not apply to accounts like HRAs, FSAs, or HSAs. The rule also does not pertain to Medicare, Medicaid, limited duration plans, or standalone vision and dental plans. There is also an option for some health plans to be grandfathered in.
The disclosure obligations set forth in the Transparency in Coverage rule have a three-year phasing in process that begins in 2022 and continues into 2024. Here are some important dates and deadlines to keep in mind for these new transparency requirements:
January 1, 2022: Effective at this time, group health carriers and self-insured plans must disclose in-network provider negotiated rates, prescription drug negotiated rates and historical net pricing, and out-of-network allowed amounts and billed charges. These disclosures must be freely accessible, machine-readable, and posted prominently on a public website. The rule also requires that these files must be updated at least monthly, thereafter.
January 1, 2023: Self-insured plans and group health carriers must provide cost-sharing information for 500 “shoppable services” to customers online. A “shoppable service” is defined by the Centers of Medicare and Medicaid Services as “non-emergent services that can be scheduled in advance.” The object is that a member should be able to price shop these services.
January 1, 2024: Online cost-sharing information must include all covered items and services.
The Consolidated Appropriations Act
At the end of 2020, Congress passed a spending measure that included several transparency requirements and provisions. A number of these provisions were in connection to the Consolidated Appropriations Act, 2021 (CAA). With an effective date of December 27, 2021 and no later than June 1 of each year thereafter, carriers and self-funded plans are required to submit information on the plan or coverage for the previous plan year, including information pertaining to prescription drugs.
The transparency requirements, as pertaining to prescription drugs are as follows:
- The 50 most frequently dispensed brand prescription drugs and the total number of paid claims for each drug;
- The 50 most costly prescription drugs by total annual spending and the annual amount spent by the plan for coverage spent for each drug;
- The 50 prescription drugs with the greatest increase in plan expenditures over the plan year preceding the plan year that is subject to the report;
- Total spending on prescription drugs by the plan or coverage, as well as by members;
- Rebates, fees, and other renumeration paid by drug manufacturers to the plan, or its administrators or service providers.
In addition to the transparency requirements for prescription drugs, the CAA also requires certain information on the following:
- Total spending by plan or coverage, broken down by the type of healthcare services;
- The average monthly premiums paid by members and employers;
- Any reduction in premiums and out-of-pocket costs associated with rebates.
Provisions of the No Surprises Act
The No Surprises Act sets certain transparency requirements for self-funded and fully insured health plans. These rules do not apply to pharmaceutical carve-out plans. The aim of these provisions is the promote transparency in pricing, regarding treatment at healthcare facilities. The provisions of the No Surprises act are as follows:
- The plan must offer price comparison guidance by telephone and online, allowing plan members to compare the amount of cost-sharing they would be responsible for, for a particular services.
- The plan must offer a database on a public website listing each provider and facility that has a direct or indirect contractual relationship with the plan.
- The plan must ensure that provider directories are current and accurate, with updates at least every 90 days.
- Insurance cards must include in-network and out-of-network deductibles and out-of-pocket maximums
- Health plans must provide an advanced explanation of benefit to enrollees for scheduled services with a good faith estimate of the member’s cost-sharing responsibility.
New Transparency Requirements, Compliance, and You
At Boon, we offer our clients an expert in their corner. We provide education and guidance to our clients to ensure their compliance and to help them choose the solutions that are the right fit for their needs. With 35+ years of innovating in the benefits space, we are equipped to adapt to shifting regulations and requirements and can help ease the benefits administration burdens of our clients.
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