Legal Alert

Enforcement Delayed Under the New Health Plan Disclosure Requirements

by Edward I. Leeds and Jean C. Hemphill
August 24, 2021

Summary

Three federal agencies, the Departments of Labor, Health and Human Services, and Treasury, jointly released new FAQs on August 20, 2021, regarding compliance with new health plan disclosure requirements of the Transparency in Coverage Final Rules (TiCFR), the No Surprises Act, and additional transparency provisions under the Consolidated Appropriations Act (CAA).

In the FAQs, the departments announced that the agencies will defer enforcement of most of the disclosure provisions. Notwithstanding the enforcement delay, however, health plans, health insurers, and health care providers are to comply with certain requirements as of their effective dates, in good faith based on a reasonable interpretation of the statute.

The Upshot

  • The TiCFR and CAA provide protections to individuals from unexpected medical bills from non-participating providers of an individual’s health plan or health insurer. The three agencies published interim final regulations in July 2021 detailing the limits on charges to individuals, and caps on cost-sharing obligations, for certain emergency care and other non-participating provider circumstances.
  • The regulations and statutory provisions also mandate substantial disclosure obligations and reporting requirements of health care providers, health plans, and health insurers. The FAQs released on August 20 relate to the communication and reporting obligations and not the restrictions on charges, balance billing and cost-sharing obligations addressed in the Interim Final Regulations.
  • The FAQs provide transitional non-enforcement relief from numerous new disclosure rules.
  • Enforcement of the CAA prescription drug benefits and cost reporting requirements, that require an initial report by December 27, 2021, and a second report on June 1, 2021, is also being deferred pending the issuance of regulations or further guidance.
  • It is important to note that some states and the District of Columbia have enacted their own laws regulating surprise bills. The agencies encourage states that are the primary enforcers of certain disclosure requirements to take a similar enforcement approach.

The Bottom Line

The enforcement relief is welcome, but health care providers, health plan sponsors, and insurers should not delay in taking measures to meet the new rules. The new rules require, among other things, the engagement of vendors to provide disclosures and to take other actions necessary for compliance. Good faith compliance with the disclosure requirements is still required as of the effective dates, most of which are January 1, 2022. A model notice published in the July 2021 regulations should be considered for compliance with the balance billing restriction disclosures.

The FAQs address the discretionary enforcement of the following TiCFR and CAA disclosure and reporting requirements:

Posting Provider Rates in Machine Readable Files (Effective Jan. 1, 2022)

  • Prescription drug pricing reporting will be deferred pending further rule-making (see Prescription Benefit and Drug Cost reporting section below).
  • Enforcement of the obligation to make public machine-readable files disclosing in-network rates and out-of-network allowed amounts deferred until July 1, 2022.

Offering Price Comparison Tools (Effective Jan. 1, 2022)

  • Price comparison tools must be provided on website and accessible in hard paper and on telephone.
  • Enforcement of CAA price comparison requirements deferred until Jan. 1, 2023 to align with the transparency regulations.

ID Cards, Deductibles, and Maximum Out-of-Pocket Amounts Applicable to the Individual (Effective Jan. 1, 2022)

  • While no regulations will be issued prior to the effective date, the agencies intend to engage in future rule-making. Pending future rulemaking, good faith, reasonable interpretation of the law is required.
  • FAQ #4, gives an example of the ID information that must be included on any physical or electronic ID card issued to a covered individual. A QRC on the ID card may be used to provide an enrollee with additional deductibles and out-of-pocket maximum limits.

Providing Good Faith Estimates of Expected Charges to Plan Members (Requirements apply for plan or policy years beginning on or after Jan. 1, 2022)

  • HHS intends to issue regulations prior to Jan. 1, 2022 and will include a prospective applicability date that gives providers and facilities a reasonable amount of time to comply with the new requirements.
  • Enforcement deferred in the meantime because consumers have existing recourse to challenge charges in internal claims and appeals.

Providing Advance EOBs to Members

  • HHS acknowledges that compliance likely is not possible by Jan. 1, 2022 but will investigate whether interim solutions are feasible for insured consumers and may provide further guidance.
  • Notice and comment rulemaking will be undertaken in the future to implement this provision.

Prohibiting Gag Clauses About Provider Prices and Health Plans Attesting to Compliance (Effective date was Dec. 27, 2020)

  • No further regulations will be issued because this CAA provision is “self-implementing.”
  • Good faith compliance based on a reasonable interpretation of the statute is expected.
  • Attestations of compliance will be collected, beginning in 2022.

Updating Provider Directories and Balance Bill Protection Disclosures (Effective Jan. 1, 2022)

  • Notice and comment rulemaking will be undertaken but not before the effective date. Good faith compliance is still required by the effective date.
  • When a plan or insurer incorrectly identifies an out-of-network provider as in-network, the departments will not deem the plan or insurer to be out of compliance if the plan or insurer imposes a cost-sharing amount that is not greater than the cost-sharing amount imposed on items furnished by a participating provider.
  • Good faith compliance is still required by the effective date. A balance billing model disclosure issued in July 2021 may be used to satisfy the balance bill disclosure requirement.
  • A balance billing model disclosure issued in July 2021 may be used to satisfy the balance bill disclosure requirement.

Continuity of Care Provisions (Effective Jan. 1, 2022)

  • Because a notice and comment period will not be undertaken until after the effective date, departments will include a prospective applicability date that provides a reasonable amount of time to comply. Good faith compliance is required until then.

Grandfathered Health Plans

  • Although exempt from various requirements under the Affordable Care Act, grandfathered health plans will need to meet the patient protection provisions and the disclosure obligations under the CAA.

Reporting of Pharmacy Benefit and Drug Costs to the Departments (Initial reports required by Dec. 27, 2021 and June 1, 2022).

  • The agencies intend to issue regulations and further recognize the operational challenges that the reporting requirements impose.
  • Enforcement of the requirement to report deferred for the first two reports, pending issuance of further guidance.
  • Plans are encouraged to work on being in a position to report the 2020 and 2021 data by Dec. 27, 2022.

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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

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