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Transparency is an ongoing, major focal point in the health insurance and health care industries. Federal and state laws have been enacted across the country, aimed at making the costs of health care and health insurance more available, transparent, and digestible for consumers and the general public.
 
In 2020, the Departments of Health and Human Services (HHS), Labor (DOL), and Treasury released regulations (rules) on a longstanding item within the Affordable Care Act (ACA), called “Transparency in Coverage” (TiC). These regulations provided new details on the application of the complicated TiC section within the ACA, which had generally gone unenforced – pending eventual regulation. The 2020 rules introduced new forthcoming TiC enforcement dates, to be implemented in staggering intervals, beginning July 1, 2022.
 
The ACA’s TiC section contains two major items for non-grandfathered, ACA-compliant health plans: (1) a public disclosure of in-network, out-of-network, and pharmacy costs, and (2) an online self-service tool for participants to view personalized out-of-pocket costs and other cost information for services rendered by their health plans.
 
In the fully insured market, compliance with the TiC items generally falls upon the health plan, which is administered by the carrier. Generally, carriers will fulfil the requirement. In the self-funded market, employers must ensure their plans meet these requirements on their own. The law permits employers to contract with insurance carriers or third parties for aid in TiC compliance; however, liability for the law cannot be transferred to another party (like an insurer or a TPA) in the self-funded space. Note: This is a brief summarization of a complex law, and employers should always work with legal counsel to ensure full compliance with all applicable laws, specific to their own circumstances.
 
TiC: Public Disclosure
The ACA’s TiC section aims to enhance transparency by requiring health plans to post detailed pricing information data on a public website, for all of their covered health items/services – to be read by machines (not necessarily humans).
 
Per the Centers for Medicare & Medicaid Services (CMS), the disclosure data “will provide opportunities for detailed research studies, data analysis, and offer third party developers and innovators the ability to create private sector solutions to help drive additional price comparison and consumerism in the health care market.”
 
Under the public disclosure, health plans must disclose their (A) in-network rates, (B) out-of-network allowed amounts and billed charges, and (C) prescription drug historical net prices. However, the prescription drug item (item C) is on an indefinite hold, pending forthcoming regulation at an unknown date.
 
The other two disclosures [items A and B above] are in effect soon. Health plans that are effective 1/1/2022 through 7/1/2022 must comply with the TiC Public Disclosure requirements by July 1, 2022. For plan years beginning August 2022 and later, compliance begins the same day as the plan year. For example, a plan that is effective 8/1/2022 must comply with the TiC Public Disclosure requirements by 8/1/2022.
 
Health plans must create machine-readable files (MRFs) to disclose this cost data, and must post the MRFs on a public website – that is not password protected or behind login. These MRFs are not intended to be consumer-facing. The data must be reported in a prescribed format, intended to be used by the data researchers’ computer systems. They are Excel-like technical data files, which must be updated on a monthly basis. Further detail of the two disclosure items is as follows:
 

1. Disclosure of In-Network Rates
   • The first MRF must show negotiated (“contracted,” “in network”) rates for each item/service covered by the plan.
   • The MRF must also include “place of service” codes and provider tax identification numbers (TINs), especially for providers with multiple locations.

 

2. Disclosure of Out-of-Network “Allowed Amounts” and “Billed Charges”
   • The second MRF must show the historical payments to, and billed charges from, out-of-network providers over an (ongoing) 90-day period. The first 90-day period begins 180 days prior to the MRF’s publication date – and so on.
   • An “allowed amount” is the maximum a plan will pay for a covered health care service. It is typically what a plan considers to be payment-in-full by an insurance carrier. If a provider charges more than the plan’s allowed amount, a provider may sometimes bill the patient for the difference between the provider’s charge and the allowed amount – a practice known as “balance billing.” (Other recent federal law, the No Surprises Act, contains major initiatives to combat balance billing.)

 
The non-compliance penalty, which is $100/day/impacted individual, falls under the Public Health Service Act and ERISA.
 
Employers with self-funded plans may outsource TiC compliance to Third Party Administrators (TPAs), which is expressly permitted in the regulations. But regulators clarified – if the TPA fails to meet compliance on the self-funded employer’s behalf, the employer/plan sponsor is responsible for noncompliance liability.
 
TiC: Self-Service Online Cost Estimator Tools
Non-grandfathered ACA-compliant plans must also create consumer-facing, self-service online cost estimators (due beginning January 1, 2023), which will help plan participants obtain personalized out-of-pocket cost information – including the plan’s corresponding negotiated rates – for all health care services and items covered by the plan, including prescription drugs.
 
This item will be implemented in two phases. Health plans must first produce and publish a list of 500 shoppable items/services (the 500 items are prescribed by the Departments) in the tool – for plan years beginning on/after January 1, 2023, on their health plans’ effective dates. Then, the following year, health plans must list all other services covered by the plan in the tool, for plan years beginning on/after January 1, 2024.
 
No Surprises Act: Consumer-Facing Price Comparison Tools
The federal No Surprises Act, within 2021’s federal CAA law, also contains a similar consumer-facing price comparison tool requirement. And, unlike the ACA’s TiC rules, the No Surprises Act does apply to non-ACA “grandfathered” plans. Regulators called the No Surprises Act “price comparison tool” item “largely duplicative” of the TiC self-service “online cost estimator” requirements. 
 
In essence, it’s important to understand that all health plans – regardless of ACA grandfathered status – will need to comply with consumer-facing pricing tools in some fashion, under either ACA and/or No Surprises Act law by 2023.
 
Under the No Surprises Act’s Price Comparison Tool requirement, plans and issuers must make available an online price comparison tool – allowing enrolled members to compare the amount of cost sharing the member would be responsible for paying under the plan, for a specific item/service rendered by a provider. The tool must be filterable according to plan year, geographic region, and plan network. The law also requires plans to provide price comparison guidance by telephone (which is not required in TiC).
 
While this is scheduled to go in effect for plan years beginning on/after January 1, 2023, regulators have not yet released guidance on this item. Regulators are expected to seek comments to determine whether compliance with the TiC Final Rule satisfies the CAA No Surprises Act mandate (in addition to telephone support). For now, we await further guidance on this item from regulators.
 
Word & Brown is polling our carrier partners to understand their plans to meet TiC’s MRF requirements; a guide will be released as soon as it’s ready. In the meantime, rely on your Word & Brown representative or the WBCompliance Team (ComplianceSupport@wordandbrown.com) for the latest details from our carrier partners, as it becomes available.
 
Stay tuned to Word & Brown for more on this law as it breaks – including enforcement actions and buzz, as enforcement begins 7/1/2022.