Federal “No Surprises Act” Health Plan Changes – 2022 Update
The federal Consolidated Appropriations Act (CAA) of 2021 brings significant changes to the American health care and health insurance industries – as well as many other changes to unrelated sectors. The CAA, which is dually the longest bill by page count and the largest spending bill in American history, specifically targets “transparency” in health care and health insurance.
CAA’s “No Surprises Act” requires health plans, health care providers, and health care facilities to make changes to the administration and operation of health plans, in efforts to improve the consumer experience – especially with regard to billing, claims, and benefits.
With its significant and far-reaching changes, the CAA’s requirements and implementation dates vary. Some changes have already been implemented, some are forthcoming, some have been delayed, and others are on hold.
Regulators are still working on creating regulations and guidance for some of these changes, all of which are slowly trickling out at varying intervals. Regulations give us more detail about a law’s implementation and enforcement details – which are critical for compliance. However, the law does not require regulators to release regulations for laws. For CAA’s “No Surprises Act,” we are still awaiting guidance and regulations in many areas. In fact, there are some portions of the law that have been implemented, but have not been given any additional detail – yet. Regulators are closely observing the facilitation and implementation of these changes, and will continue to release more information as it becomes necessary and available.
For employers with fully insured plans, most changes will be facilitated by the health plan issuer (the carrier). Employers with self-funded plans will need to take measures to ensure changes are made to their plans, including satisfying implementation rules and deadlines.
Regardless of the health plan’s funding structure, federal ERISA law places “fiduciary responsibility” on almost all employer plan sponsors. Ultimately, the plan sponsors’ federal ERISA fiduciary responsibilities require them to ensure their plans meet all obligations – including recent changes – even for those with fully insured plans. This column contains a high-level summary of the latest information, as of April 2022.
Prohibition of Gag Clauses
In order to facilitate transparency in health care and to insert CAA’s transparency changes alongside overlapping “Transparency in Coverage” rules of the Affordable Care Act (ACA), health plans/issuers are prohibited from contracting with providers who would prevent/restrict the plan from sharing provider-specific cost details or “quality of care” information to the plan sponsor, participants/beneficiaries, or referring providers.
This provision, which went in effect on December 27, 2020, prevents providers from putting a “gag clause” into their contracts, which would otherwise prevent a plan sponsor from sharing such critical pricing/quality transparency information with interested parties.
The Department of Labor (DOL) will require attestations from plan sponsors for this requirement in the future. However, the attestation provision is on indefinite hold until more details become available from regulators.
Mental Health Parity
The Mental Health Parity & Addiction Equity Act (MHPAEA) of 2008 generally requires health plans to ensure “mental health” and “substance use disorder” benefits are equivalent in structure to their plans’ standard “medical and surgical” benefits.
If a plan’s mental health benefit comes with (non-numerical) limitations, then those same limitations must also exist for the plan’s medical and surgical benefits. MHPAEA calls such limitations “non-qualitative treatment limitations” (NQTLs), which include items that limit the scope or duration of treatment but are not expressed numerically – such as prior-authorization requirements, etc.
CAA requires plans to produce “comparative analyses” of their benefit structures, to analyze mental health and medical/surgical benefits – to ensure the plan is meeting the requirements from the 2008 law. Furthermore, CAA now requires plans to use DOL’s MHPAEA Self-Compliance tool. Using the tool previously had generally been a mere recommendation.
This Mental Health Parity item is in effect now, and the DOL is currently conducting audits and requesting information from employer health plans about it. In previous rounds of audits before the CAA was signed into law, the DOL found significant non-compliance among all health plans. The “No Surprises Act” intends to bolster compliance in this area.
Continuity of Care
If a “continuing care patient” is receiving significant care from a provider, and that provider leaves the health plan’s network, then that patient may continue to see the (now out-of-network) provider at in-network rates for up to 90 days.
A “continuing care patient” is a person undergoing treatment for a “serious and complex condition”; a person undergoing institutional or inpatient care; a person scheduled to undergo non-elective surgery; a person who is pregnant and undergoing treatment for the pregnancy; or, a person who is terminally ill and is receiving treatment. Plans must also have a plan in place to notify “continuing care patients” when providers or facilities leave a plan’s network. These changes are in effect for health plan years beginning January 1, 2022.
The “No Surprises Act” places strict limitations on plans regarding balance billing – which is when a patient receives treatment at an in-network facility by an out-of-network provider, and gets “surprise billed” by the out-of-network provider for the balance of unpaid out-of-network claims. These “No Surprises Act” surprise billing changes generally apply to plans with plan years beginning on/after January 1, 2022.
A health plan may not assess out-of-network charges for patients receiving treatment for emergency care at out-of-network facilities. The CAA assigns a “prudent layperson” standard with regard to determining “emergency” services. Under this standard, if a common “layperson” would assume a condition to be an “emergency” (even if it is not), the surprise billing consumer protections apply. Additionally, providers must generally collect patient consent before sending a stabilized patient to an in-network facility, following an emergency.
Furthermore, a health plan may not “balance bill” in non-emergency circumstances, if that patient seeks care at an in-network facility but is treated by an out-of-network provider, tested by an out-of-network lab, etc. Some out-of-network providers, however, can ask a patient to consent to receiving non-emergency out-of-network services at the in-network facility in advance. However, this does not apply to emergency medicine, anesthesiology, and other services that had previously been common “surprise bill” scenarios.
Lastly, a new model notice has been released by the Centers for Medicare & Medicaid Services (CMS) which plan fiduciaries are required to distribute to participants, detailing these “surprise billing” limitations. Furthermore, plans and insurance issuers must post on a public website and include in each Explanation of Benefit (EOB) information regarding balance billing restrictions, applicable state laws and restrictions on balance billing, and contact information for federal and state agencies that can assist if a patient receives a prohibited “surprise” balance bill.
Provider Network Directories
In efforts to enhance accuracy of information in health care, health plans with plan years effective 1/1/2022 are required by law to keep their provider network directories up to date under strict timeframes. Plans must have an established process in place to verify and update provider directories at least once every 90 days. Furthermore, plans must update their databases within two business days of a provider leaving a network.
Plans must also respond to participants’ questions about provider networks (via telephone and electronically) within one business day. They must also have a provider directory listed on a public website, and must include statements about accuracy in printed directories (if applicable). Lastly, if a plan participant is given incorrect information about a provider being “in network” when the provider is not “in network,” then the plan must pay benefits at in-network amounts.
ID Card Updates
The CAA requires health plans with plan years beginning on/after January 1, 2022 to list plan deductibles, out-of-pocket limits, and a phone number and website address for consumer assistance on all members’ health plan ID cards. (Many health plans issued new ID Cards in late 2021 or early 2022 to begin complying with the law.)
Good-Faith Estimates by Providers to Consumers
The CAA requires health plans (with plan years beginning on/after January 1, 2022) to provide good-faith estimates to inquiring consumers about the cost of care for requested procedures. Providers are required to produce an estimate, including billing and diagnostic codes, for a consumer to analyze with his/her/their health plan to understand cost sharing for the service.
Advanced Explanation of Benefits (EOBs) by Plans to Consumers
When consumers receive “good faith estimates” from providers, health plans will be required to produce “Advanced EOBs” for covered participants/beneficiaries utilizing those estimates – showing how benefits will be paid under the plan, the provider’s network status, etc. However, this “Advanced EOB” requirement is currently delayed – pending further regulatory guidance.
Price Comparison Tool
For health plans with plan years effective on/after January 1, 2023, price comparison tools for services must be made available to consumers. Plans must offer guidance via telephone and make an online price comparison tool available, allowing a plan participant to compare the amount of cost sharing he/she/they would be responsible for paying under the plan for a service, from a specific provider. These items closely mirror the ACA’s “transparency in coverage” requirements – however, the CAA explicitly requires plans to provide these services via telephone, whereas the ACA does not. More detail from regulators is expected in this area.
Broker Commission Transparency
Health insurance brokers and consultants are required to disclose commission structures on self-created disclosure notices, in advance of a client’s selection of services and/or plan renewal. Disclosure is required for agents earning at least $1,000 or more in direct or indirect compensation. You may want to revisit a previous column that details these new Federal Broker Commission Disclosure Requirements, and includes access to Word & Brown’s exclusive, customizable Agent Compensation Disclosure document.
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