Employee Benefits Compliance

Coverage Transparency Proposed Rule to Require Plans to Disclose Pricing / Provide Notice

final rule - insurance

The Transparency in Coverage Proposed Rule was recently released by the Departments of Health and Human Services, Labor and Treasury (jointly “the Departments”) delivering on the Trump executive order requiring health care price information to be provided to consumers. These proposals would require most group health plans, including self-insured plans, and health insurance issuers to disclose price and cost-sharing information to participants, beneficiaries, and enrollees. The Departments are proposing to give consumers real-time, personalized access to cost-sharing information, including an estimate of their cost-sharing liability for all covered health care items and services through an online tool that most group health plans and health insurance issuers would be required to make available to all of their members, and in paper form, at the consumer’s request. These rules become effective one year following publication of the final rule.

Background

On June 24, 2019, President Trump signed Executive Order Improving Price and Quality Transparency in American Healthcare to Put Patients First directing the Departments of Health and Human Services (HHS) and Treasury to develop regulations to require hospitals, healthcare providers, health insurance issuers, and self-insured group health plans to provide or facilitate access to information about expected out-of-pocket costs for items or services to patients before they receive care. Additionally, this Order includes provisions to direct rulemaking related to more eligible medical expenses and increased use of some account-based plans (e.g., FSA, HDHP, and HSA). While the Executive Order was light on content, focusing more on intent, the order did provide some information about what to expect in the next 60-180 days of HHS/Treasury rulemaking. For complete details, see the Leavitt article.

Approaches to Making Health Care Price Information Accessible

These proposed rules include two approaches to make health care price information accessible, intended to make it easy to do comparison-shopping.

Allowed Amount Disclosure

Each non-grandfathered group health plan or health insurance issuer offering non-grandfathered health insurance coverage in the individual and group markets would be required to make available to participants personalized out-of-pocket cost information for all covered health care items and services through an internet-based self-service tool and in paper form upon request. Appendix 3 identifies those data elements which includes general information about the plan, services and historical information about the plan’s out-of-network costs, including actual amount the plan paid to the provider plus the participant’s share. Amounts would not be reported for services and providers with fewer than ten different claims for payment to protect privacy.

In-Network Negotiated Rate Disclosure

Each non-grandfathered group health plan or health insurance issuer offering non-grandfathered health insurance coverage in the individual and group markets would be required to make available to the public the in-network negotiated rates with their network providers and historical payments of allowed amounts to out-of-network providers through standardized, regularly updated machine-readable files. See Appendix 2.

Model Notice

Self-funded plans and insurance carriers must provide an estimate of the individual’s cost-sharing, including information used to calculate the estimate, required prerequisites and an explanation of any limitations that apply to the estimate. The model notice may be used by the self-funded plan or carrier when the participant requests cost-sharing information in paper form or may use the language on its internet-based self-service tool. The model may be modified so long as pertinent information remains. While use of the model notice is encouraged, it is not mandatory.

To Make Comments

As with all proposed rules, those affected by the rule are permitted to submit comments that will be used when considering development of the final rules. Interested parties may comment by January 15 at http://www.regulations.gov.

Editorial Comments

Some states already have similar transparency laws although most do not extend to self-funded plans, making this new law significant for plan sponsors. Self-funded plan sponsors should familiarize themselves with this new rule and prepare for compliance as soon as 2021 (although the final rule publication date could make this effective date later). Additional guidance is yet to come following the comment period for these proposed rules. It is possible that the mandate to maintain a website to post of the data elements listed in these proposed rules may be significantly watered down if found too burdensome. Hospitals and insurance carriers (as the other entities subject to this new rule) are already subject to similar transparency and posting requirements, making this added requirement less burdensome. But for self-funded plan sponsors, if unable to utilize the website and data maintained by their Third-Party Administrator (TPA) or insurance carrier, could be faced with considerable effort. Making comments by interested self-funded plan sponsors (yes, you employers sponsoring a level-funded or self-funded plan!) all the more important for shaping the final regulations.

For details on state transparency laws, see: http://www.ncsl.org/research/health/transparency-and-disclosure-health-costs.aspx 

Resources

The proposed rule can be found here: https://www.hhs.gov/sites/default/files/cms-9915-p.pdf.

News Release at https://www.cms.gov/newsroom/fact-sheets/transparency-coverage-proposed-rule-cms-9915-p.pdf.

Appendix 1: Transparency in Coverage Model Notice
Appendix 2: Negotiated Rate Machine-Readable File Data Elements
Appendix 3: The Allowed Amount Machine-Readable File Data Elements

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