Over the last few years there has been an increased focus on price transparency in health care.  With the enactment of the Consolidated Appropriations Act (“CAA”) and the release of the Transparency in Coverage final rules, we may be closer than ever to knowing how much a provider will charge a Health Plan, and its Participants, prior to the date of service or treatment. The hope is that these price disclosures will allow both Health Plans and Participants to make informed choices about the health care marketplace and to shop for services from lower-cost, higher-value providers.

Despite the shared obligation with insurance carriers, Plan Sponsors are poorly positioned to fulfill these requirements, given that most of the information required to be disclosed is held by the insurance carrier or Third-Party Administrator (TPA).  Below is an outline of what these rules require of Plan Sponsors and about what your Graham Team is doing to help you comply.

Transparency in Coverage

The Transparency in Coverage (TiC) Final Rule released by the Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury (the “Departments”) builds upon the Hospital Transparency Rules which became effective in January of 2021.  As the Centers for Medicare and Medicaid Services (CMS) describes it, “[t]his final rule is a historic step toward putting health care price information in the hands of consumers and other stakeholders, advancing the Administration’s goal to ensure consumers are empowered with the critical information they need to make informed health care decisions.” 

Under the Final Rule published, most health plans or health insurance carriers are required to make the following information available:

1. Machine-readable Files: The Final Rules require separate “machine-readable files” be made available to the public which disclose:

1. negotiated rates for all covered items and services between the Plan/Carrier and in-network providers; and
2. historical payments to, and billed charges from, out of network providers.

The Final Rule also includes a requirement that Plans/carriers disclose the in-network negotiated rates and historical net prices for all covered prescription drugs, but the enforcement of this requirement has been delayed until the Departments determine how this requirement and the prescription drug reporting requirements of the CAA fit together.

2. Price Comparison Tool: The Final Rules require Plans and health insurance issuers to make available to Participants (beneficiaries and enrollees), personalized out-of-pocket cost information and the negotiated rates for all covered health care items and services via an internet-based self-service tool (and in paper format upon request).

The Price Comparison Tool must be in place for Plans beginning on or after January 1, 2023 and must provide information on an initial list of 500 services determined by the Departments.  The remainder of all other items and services will be required to be available to participants via this tool beginning for Plans beginning on or after January 1, 2024.

As with the prescription drug cost disclosures, there is some overlap and duplicity with the CAA when it comes to price comparison tools.  The CAA also requires health plans to offer price comparison to make this information on a website which would allow participants to compare the amount of cost-sharing applicable for services provided by participating providers within a geographic region.  Notably, in addition to a website, the CAA requires that this information be made available to participants by telephone as well.

Graham Action - Your Graham Service Team is working with our carrier and TPA partners to ensure that they will be prepared to meet the deadlines outlined in TiC and the CAA with respect to price transparency disclosures to participants and enrollees.  

Consolidated Appropriations Act (CAA)

Beyond the “No Surprises Act” within the CAA, the CAA contains other protections aimed at making transparency of health care costs easily accessible to the consumer.

1. New Identification Card Requirements: Any physical or electronic insurance identification card issued to participants must now include any applicable deductibles and out-of-pocket maximums, as well as a telephone number and website address the enrollee can contact if he/she requires further assistance.

Graham Action - Your Graham Service Team is working to ensure that your carrier or TPA issues medical identification cards with this required information for your enrollees.

2. Accurate Provider Directories: Provider directories must have accurate, up-to-date information about participating providers.  This rule is intended to protect participants from surprise billing from a non-participating provider. Notably, if a participant receives an item or service by a non-participating provider or facility, when he/she believed that the provider or facility was in-network based on incorrect information in the directory, the participant will be protected from cost-sharing.

Graham Action - Your Graham Service Team is working with our carrier and TPA partners to ensure they have a process in place to continually update their provider directories. 

3. Continuity-Of-Care Protections: A “continuing care patient”[1] who receives care from a provider whose contractual relationship with the Plan terminates (i.e., the facility or provider will no longer be “in network”), the Plan must provide patient with notification and the right to elect continued transitional care for the next ninety (90) days.

Graham Action - Your Graham Service Team is working with our carrier and TPA partners to ensure they have a procedure in place to notify affected continuing care patients.

4. Prohibition on Gag Clauses Related to Price and Quality Data:  Plans are not permitted to enter into an agreement with a medical provider, TPA or other service provider that prevents them from obtaining data about provider-specific costs or the quality of care information.

Graham Action - Your Graham Service Team is working to review your ASO Agreements with your TPAs and PBMs to ensure there are no contractual provisions which would otherwise prohibit the disclosure of this data to the Plan Sponsor.

5. Advanced Explanation of Benefits: At the time an enrollee schedules a service, a facility or provider will be required to provide a notification of a “good faith estimate” of the expected charges to the Plan for furnishing the scheduled item or service. Upon receipt of the estimate, the Plan will then be required to send the enrollee an Advanced Explanation of Benefits that includes specific information listed in the statute (e.g., an estimate of the cost-sharing to enrollee for the service or treatment).

Graham Action - The enforcement of this requirement has been delayed by the Departments in recognition of the complexity involved in the transmission of this data amongst the various parties.  When further guidance is issued by the Departments, your Graham Service Team will work with our carrier and TPA partners to ensure they have a clear procedure for participants to request the Advanced EOBs and are prepared to meet the deadlines established by the Departments.

6. Mental Health Parity Comparative Analysis: Plans imposing Non-Quantitative Treatment Limitations (NQTLs) (such as preauthorization requirements) on mental health or substance use disorder benefits must perform (and document) a comparative analysis of the application of these NQTLs.  Reporting the results of the analysis is not automatic.  Plans must make the analysis available to the Departments or State Authorities upon request.

Graham Action - The CAA requirements related to this comparative analysis are complicated.  Your Graham Service Team is working with our carrier and TPA partners to determine whether they will perform this analysis on behalf of Plan Sponsors.  If not, we are working to identify third-party vendors who can complete this analysis on your behalf.

Finally, in order to address the full costs of health benefits to the Plan Sponsor, and ultimately to its Participants, the CAA also contains a requirement that service providers (including insurance brokers) disclose all direct and indirect compensation it receives in connection with the services it provides to the Plan. These new disclosures will allow Plan Fiduciaries to protect Plan assets and ensure they are utilized for appropriate purposes (i.e., benefits and expenses).  To that end, in order to comply with the fiduciary obligations under ERISA, it will be incumbent upon fiduciaries to continuously assess the qualifications of, and compensation paid to, the Plan’s service providers. The process by which fiduciaries evaluate its providers will be almost as important as the ultimate decisions it makes.

[1] Continuing care patient is defined as an individual who is: (1) undergoing a course of treatment for a serious and complex condition from the provider or facility; (2) undergoing a course of institutional or inpatient care from the provider or facility; (3) scheduled to undergo (non-elective) surgery from the provider; (4) pregnant and undergoing a course of treatment for pregnancy from the provider; or (5) terminally ill and is receiving treatment for such illness from the provider or facility.