This alert provides an overview of the No Surprises Act, CAA Transparency and Transparency in Coverage requirements, and the provisions of the interim final rules, the proposed rule, and the FAQs as they apply to group health plans.

• On November 12, 2020, the Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury (collectively, the Departments), released to the Transparency in Coverage final rules (TiC) that require non-grandfathered group health plans to disclose certain cost sharing information to participants.
• On December 27, 2020, the No Surprises Act (NSA) was signed into law as part of the Consolidated Appropriations Act, 2021 (CAA). These new provisions are intended to eliminate the surprise medical bills and ensure patients have access to up-to-date information about which providers are in their healthcare network. Additionally, the CAA contains provisions (hereinafter, “CAA Transparency”) to increase the transparency of healthcare information under group health plans, which are in addition to TiC transparency rules.
• On July 13, 2021, the Departments along with the Office of Personnel Management (OPM) published an interim final rule entitled “Requirements Related to Surprise Billing; Part I,” implementing certain provisions of the No Surprises Act.
• On August 20, 2021, the Departments published FAQs Part 49 to provide further guidance regarding the No Surprises Act and the TiC transparency provisions.
• On September 16, 2021, the Departments published a proposed rule, “Requirements Related to Air Ambulance Services, Agent and Broker Disclosures, and Provider Enforcement,” relating to air ambulance reporting requirements.
• On October 7, 2021, the Departments and the OPM published interim final rules with request for comments titled “Requirements Related to Surprise Billing; Part II,” which generally implement the provisions of the No Surprises Act that provide for a Federal independent dispute resolution (IDR) process.

Effective Dates

The NSA provisions are generally applicable for plan years of group health plans (including grandfathered plans) beginning on or after January 1, 2022. However, for certain provisions, the FAQs Part 49 either postpone an enforcement date or provide that reasonable good faith compliance is acceptable until regulations are issued. As reflected in the chart below, certain sections of the CAA Transparency rules have been postponed, and the Departments delayed enforcement of the TiC provisions relating to public machine-readable files until July 1, 2022, for non-grandfathered plans. In addition, the Departments delayed enforcement of the TiC’s requirement for a price comparison tool until plan years beginning after January 1, 2023. The following table summarizes the adjusted effective dates for the NSA, CAA Transparency and TiC provisions based on the information released to date:

Where a Plan Year is indicated, the effective date is the first day of the plan year.

Below we summarize each of the provisions listed in the above table.

NO SURPRISES ACT

“Surprise” Cost Sharing Protections

Patients are protected from “surprise” medical bills by being limited to in-network cost sharing (deductibles, coinsurance, and copays will be at in-network levels and will apply to the in-network out-of-pocket maximum) for

• emergency services and
• ancillary services at an in-network facility. Ancillary services are any of the following:
  • Emergency services,
  • Anesthesiology,
  • Pathology,
  • Radiology,
  • Neonatology,
  • Items and services provided by other specialists as specified in regulations,
  • Diagnostic services (unless regulations list the services as advanced diagnostic laboratory tests), and
  • Items and services provided by an out-of-network provider if there is no in-network provider who can furnish the services at the facility.

Patient cost sharing in the absence of a contracted amount will be based on a “Recognized Amount.” This is the amount under state law or state All Payer Model Agreement, if applicable (often self-insured plans can opt into these agreements). If the state law is not used, the Recognized Amount is the lesser of the billed charge and the Qualified Payment Amount (QPA). The QPA is generally the median contracted price on 1/31/2019, for the geographic region (generally a metropolitan area) for that service increased by CPI-U. For 2022, the CPI-U increase is the CPI-U for the 12 months ending 8/31/2021 over the CPI-U for the 12 months ending 8/31/2018. For future years, the QPA will be based on CPI-U increase for 12 months ending 8/31 of the prior year.

The cost-sharing protections also apply to out-of-network air ambulance, with a modification to the QPA for air ambulance to allow for a mileage-based formula. However, the cost-sharing protections do not yet apply to ground ambulance services.

Cheiron Observation: Basing cost sharing on a QPA linked to 2019 charges increased with CPI could create a significant difference between the out-of-network cost sharing and in-network cost sharing, should future increases be different than CPI. Should in-network charges increase faster than CPI, at some future point participants would pay less for out-of-network providers.

Payments to Out-of-Network Providers and Independent Dispute Resolution

The plan or insurer must make an initial payment or provide a notice of denial within 30 days after the provider sends the bill to the plan or insurer. This will be followed by a total payment equal to the amount by which the out-of-network rate exceeds the patient cost-sharing, less any initial payments.

The law creates a dispute resolution process that includes a 30-business-day open negotiation period and an Independent Dispute Resolution (IDR) process if negotiations fail.

The IDR Process: With respect to the IDR process, the interim final rules (“Requirements Related to Surprise Billing; Part II”) provide that:

• The parties must exhaust the 30-business-day open negotiation period before initiating the Federal IDR process. Either party may initiate the Federal IDR process during the 4-business-day period beginning on the 31st business day.
• The parties may select a certified IDR entity and if they do not, the Departments will do so. (The interim final rules also provide guidance on how entities can become a certified IDR entity and establish a process for the revocation of an entity’s certification.)
• The selected certified IDR entity cannot be a party to the determination; an employee or agent of such a party; or have a material familial, financial, or professional relationship with such party.
• Within 10 business days of selection of the IDR entity, each party must submit to the certified IDR entity an offer for a payment amount for the item or service in dispute and other information related to the offer as requested by the IDR entity and may submit additional information for the IDR entity to consider.
• The IDR entity must choose one or the other and may not, for example, split the difference.  In making a determination of which payment offer to select, the IDR entity must:
  • Begin with the presumption that the QPA is the appropriate out-of-network rate.
  • Select the offer closest to the QPA unless the certified IDR entity determines that credible information submitted by either party clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate. The IDR entity may consider a number of factors including (but not limited to) provider qualifications, market share, patient acuity/complexity, and past contracting efforts. 
• The IDR entity may not consider usual and customary charges.

Quarterly Publication: The rules require the collection of information related to the IDR process from certified IDR entities in order to allow the Departments to quarterly publish information on IDR payment determinations.

IDR Portal: The Departments are establishing a federal IDR portal to administer the Federal IDR process that will be available at https://www.nsa-idr.cms.gov.

Cheiron Observation: Amounts in excess of what are currently out-of-network allowed amounts will become the responsibility of the plan or insurer, adding to the cost of care. Some plans are exploring ways to increase the scope of the network via what is typically known as a silent wrap or secondary network to minimize potential impact. However, a careful evaluation of network allowed amounts and associated fees should be considered as the combination could result in both higher cost to the patient and/or plan.

Restrictions on Balance Billing by Out-of-Network Providers

Out-of-network providers may not balance bill a patient under any circumstances for ancillary services (defined above) at an in-network facility or for emergency services. For all other services at a participating health care facility, out-of-network providers may only balance bill the patient if they satisfy the following “notice and consent” requirements to provide 72 hours in advance of the appointment (or the day the appointment is made if made less than 72 hours in advance, but at least 3 hours before the appointment) the following:

• A good faith estimate for the charge for services in writing, paper or electronic (as selected by participant) and is available in the 15 most common languages in the state or geographic region of the facility
• A list of in-network providers at the facility who can perform the service and notification that the participant can be referred, at their option, to one of those providers and that the additional amount over the allowed amount would not apply to an in-network provider
• Information about any prior authorization or care management requirements
• Consent must be signed by the participant and a copy provided to the participant through mail or email (as selected by the participant)

Regulations indicate that the notice and consent requirements must be met for each provider and facility providing services. In addition, if the criteria cannot be met for unforeseen, urgent medical needs that arise at the time services are rendered, then out-of-network providers will not be able to balance bill for those services.

Expansion of Emergency Services

Under the Affordable Care Act, non-grandfathered plans were already required to cover emergency services at in-network copays and coinsurance levels even at an out-of-network facility without prior authorization. However, such care was limited to an emergency department of a hospital (and related ancillary services) until the patient was stabilized. Balance billing by the hospital was permitted. A prudent layperson standard was applied regarding whether a service is an emergency.

The No Surprises Act (which added new sections of law) and the regulations expand the emergency services definition and change the coverage in the following manners:

• The emergency services rules become applicable to grandfathered plans, i.e., grandfathered plans must now comply with the ACA rules to provide coverage without prior authorization, and without regard to whether the provider of emergency services provider is an in-network provider
• All patient cost sharing for emergency care, including deductibles and out-of-pocket maximums, must be based on the in-network cost sharing provisions
• Freestanding emergency departments are included
• The July 13 rule notes that the prudent layperson standard must be met on a case-by-case basis before initial denial (no automatic denial based on ICD-10 codes)
• Emergency care provided at an out-of-network facility is defined to include post-stabilization services until all of the following are met:
  • The attending emergency physician or treating provider must determine that the patient is able to travel using non-medical transportation or nonemergency medical transportation to an available participating provider or facility within a reasonable travel distance (taking into account the individual’s medical condition);
  • The provider or facility furnishing post-stabilization services must satisfy certain notice and consent requirements;
  • The individual (or the individual’s authorized representative) is in condition to receive the notice and to provide informed consent; and
  • The provider or facility must satisfy any additional requirements or prohibitions as may be imposed under applicable state law.

Air Ambulance Reporting

Under the NSA, the rules for calculating the allowed amount and IDR, no balance billing, and application of in-network plan terms apply to an Air Ambulance Service used in an emergency. In addition, reporting to the DOL is required for air ambulance services for two years for all group health plans. The plans must provide claims data for calendar year 2022 by 3/31/2023 and for calendar year 2023 by 3/31/2024. For each claim for air ambulance services that was received or paid, the following information will have to be included:

1. Identifying information for the group health plan and any entity reporting on behalf of the plan;
2. Market type for the plan (large group, small group, self-insured plan offered by small employer, or self-insured plan offered by large employer);
3. Date of service;
4. Billing NPI (National Provider Identifier) information;
5. Current Procedural Terminology (CPT) code or Healthcare Common Procedure Coding System (HCPCS) code information;
6. Transport information including
   1. aircraft type,
   2. loaded miles, pick-up (origin zip code) and drop-off (destination zip code) locations,
   3. whether the transport was emergent or non-emergent,
   4. whether the transport was an inter-facility transport, and
   5. to the extent available, the service delivery model of the provider (such as government-sponsored, public-private partnership, etc.);
7. Whether the provider had a contract with the plan to furnish air ambulance services;
8. Claim adjudication information (including whether the claim was paid, denied, appealed; denial reason; and appeal outcome); and
9. Claim payment information (submitted charges, paid amounts, and cost sharing amounts if applicable).

Continuity of Care

Under the NSA's continuity of care rules, a plan must timely notify each individual enrolled under such plan who is a continuing care patient with respect to a provider or facility that has terminated its contractual relationship with the plan of such individual’s right to elect continued transitional care from the terminated provider or facility. The participant must be permitted to elect to continue to receive care under the same terms and conditions as would have applied had the provider or facility remained in-network and to continue to be treated by the provider or facility for a period of up to 90 days (but not later than the date at which the participant is no longer a continuing care patient). In states that have continuity of care rules, fully insured plans may be subject to additional or more stringent continuity of care requirements. For self-insured plan sponsors or their administering insurer, the administrator must make a participant who is a continuing care patient aware if their provider or health care facility is no longer in-network. A "continuing care patient" is a patient that falls within one of the following categories:

• Undergoing a course of treatment for a serious and complex condition defined as
  • If an acute illness, a condition serious enough to require specialized medical treatment to avoid the possibility of death or permanent harm
  • If a chronic illness or condition, a condition that is life-threatening, degenerative, potentially disabling, or congenital and requires specialized medical care of a prolonged period of time
• Undergoing a course of institutional or inpatient care
• Scheduled to undergo nonelective surgery, including postoperative care
• Pregnant and undergoing a course of treatment for the pregnancy
• Terminally ill and receiving treatment for such illness

ID Cards

The Act requires that physical or electronic ID Cards include in clear writing any deductible and any Out-Of-Pocket (OOP) maximum, as well as a telephone number and website address for consumer assistance information. The FAQs indicate that good faith compliance would include cards having only the main deductible and out-of-pocket maximum limitations, rather than all deductibles and out-of-pocket maximums.

Good Faith Estimate

After further rules are issued, a provider or facility, will be required to inquire whether the individual is enrolled in a health plan or health insurance coverage when the individual schedules items or services. If the individual is enrolled in a health plan or coverage, the provider must provide the plan or insurer a good faith estimate of the expected charges along with expected billing and diagnostic codes for the items and services that are expected to be provided. (If the individual is not enrolled in a health plan or coverage, the notification is to be provided to the individual.)

The good faith estimate is to be based upon the items or services that are scheduled and any other items or services expected to be provided in conjunction with the scheduled items or services (including those provided by another provider or facility).

Advanced EOBs

After further rules are issued, plan sponsors will be required to provide an “advanced Explanation of Benefits” (EOB) to participants after notification of the good faith estimate is submitted by a health provider or health care facility within one business day of notification (three business days if scheduled service is at least 10 days in the future) that contain:

• Whether the provider or facility is in-network or out-of-network and
  • If in-network, the contracted rate
  • If out-of-network, how to obtain information on in-network providers and facilities
• The good faith estimate included in the notification from the provider or facility
• Good faith estimates of:
  • The amount the plan is responsible for paying
  • The cost-sharing that will have to be paid by the participant
  • The amount that has been incurred towards the participant’s deductible and OOP maximum
• Whether a service is subject to medical management
• A disclaimer that the information provided is an estimate based upon the expected services and is subject to change.
• Any other additional information or disclaimer that the plan determines is appropriate, as long as it is consistent with the information and disclaimers required.

The timing requirements may be modified by the agencies for an item or service that has low utilization or significant variation in costs (as specified by the agencies).

Price Comparison Tool

Plan sponsors must provide participants with an online price comparison tool via their website and by telephone that allows participants to compare for each provider the amount of the participant’s cost sharing with respect to a specific service. This requirement is largely the same as the price transparency tool component of the TiC. The TiC require price information available online and in paper form for 500 items and services for plan years beginning on or after 1/1/2023, and for all services one year later. The Departments will defer enforcement of the requirement that a plan or issuer make available a price comparison tool (by internet website, in paper form, or telephone) until plan years beginning on or after 1/1/2023, in order to align with that of the TiC requirements.

Provider Directory Accuracy

Plans and insurers are required to maintain up-to-date provider directories and to provide prompt response to network inquiries. Specifically, they must:

• Verify the provider directory information in the database at least every 90 days;
• Establish a procedure for removal of a provider or facility with respect to which the plan or issuer cannot verify the information in the database;
• Update of the database within two (2) business days of receipt of the information from the provider or facility. (Providers and facilities are also required to notify plans when there is any change to their provider directory information.);
• Establish a “response protocol” to respond within one (1) business day to a request on whether a provider or facility has a contractual relationship with the plan or issuer and retain the communication in the individual’s file for at least two (2) years;
• Establish a database of each health provider and health care facility that has direct or indirect contractual relationship under the plan/coverage listing name, address, specialty, telephone number, digital contact information and any other prescribed information; and
• With respect to any print directory, provide a notification that the information was accurate as of the date of publication and that an individual should consult the database to obtain the most current provider directory information.

The plan must use in-network cost sharing for patients if the patient was inaccurately informed that the provider or facility is in-network by the website, printed provider directory, or customer service phone, text, or instant messenger line that the provider is in network. It also appears that the plan must use in-network cost sharing if the patient requested information as to whether the provider of facility is in-network and did not receive a response.

Public Notice

Plan Sponsors  are required to make publicly available, post on their website, and include in each EOB the following  information:

• Requirements and prohibitions pertaining to balance billing
• Any State law requirements regarding amount that providers may charge
• Information on contacting appropriate State and Federal agencies in the case that a participant believes a provider or facility has violated any requirements

The Departments have developed a model notice that has been sent to the Office of Management and Budget for approval under the Paperwork Reduction Act.

CAA TRANSPARENCY

Gag clauses

Group health plans may not enter into an agreement with a provider, network, third-party administrator (TPA) or other service provider that would restrict the plan from:

• Providing provider-specific cost and/or quality information to referring providers, plan sponsors, and participants
• Electronically accessing de-identified claims and encounter information for each participant upon request and consistent with HIPAA’s privacy rules, including financial information, provider information, service codes, or other data elements included in claim or encounter transactions
• Sharing the information described above with a business associate

Providers or service providers, however, can place reasonable restrictions on public disclosure of the information. Plans must provide an annual attestation that they comply with this section; however, this attestation has been deferred until at least 2022.

NQTL Documentation for Mental Health Parity

Beginning February 10, 2021, group health plans that offer health care coverage that provides both medical and surgical benefits and Mental Health/Substance Use Disorder (MH/SUD) benefits and that impose non-quantitative treatment limitations (NQTLs) on MH/SUD benefits, must perform and document comparative analyses of the design and application of such NQTLs. Their analyses and documentation must be available to the applicable State authority (or, as applicable, to the Secretary of Labor, the Secretary of HHS, or the Secretary of Treasury), upon request. See our Alert dated 3/3/2021 for more information.

Select Pharmacy and Medical Reporting

Section 204 of division BB of the CAA includes certain reporting requirements for plans and insurers. These reporting requirements primarily relate to prescription drug expenditures and includes general information regarding the plan or coverage. More details on the requirements can be found in our Alert dated June 30, 2021. As indicated in that Alert, the Agencies issued a request for input from the public regarding these reporting requirements. As a result of that input, the Departments will defer enforcement of the requirement to report until further guidance is issued. The Departments strongly encourage plans and issuers to start working to ensure that they will be able to begin reporting the required information with respect to 2020 and 2021 data by 12/27/2022, which is likely to be the date that will be listed in the upcoming guidance.

Broker and Service Provider Compensation

CAA imposes new disclosure requirements for brokers and consultants providing services to ERISA health plans effective for contracts for services executed, extended, or renewed on or after 12/ 27/2021. These new requirements will apply to contracts of at least $1,000 (adjusted for inflation in future years) and require the plan fiduciary to obtain from the broker or consultant the following information:

• A description of the services to be provided to the group health plan pursuant to the consulting or brokerage services contract;
• If applicable, a statement as to whether the broker or consultant (or its affiliate or subcontractor) expects to provide services to the plan as a fiduciary;
• A description of all direct compensation the broker or consultant (or its affiliate or subcontractor) reasonably expects to receive in connection with its anticipated services;
• A description of all indirect compensation the broker or consultant (or its affiliate or subcontractor) reasonably expects to receive in connection with its anticipated services, including any incentive compensation;
• If applicable, a description of how compensation is shared among the broker/consultant and its affiliates or subcontractors;
• If the broker’s or consultant’s compensation is received on a transaction basis (e.g., incentive compensation based on business placed or retained, such as commissions and finder’s fees), the information must identify the relevant services and who is paying and receiving such commissions and fees; and
• A description of termination-related fees, including (if applicable) a description of how pre-paid amounts will be calculated and refunded.

This information must be provided reasonably in advance of the establishment or renewal of the contract for services. If information changes, there is an obligation for the broker/consultant to notify the plan fiduciary as soon as practicable, but no later than 60 days following its knowledge of the change. If the broker/consultant fails to provide the required information and the plan fiduciary was not aware of the failure, then, upon discovery of the failure, the plan fiduciary must take certain steps to avoid the transaction being considered as a prohibited transaction. The steps may include notifying the DOL of such failure and terminating the contract.

TRANSPARENCY IN COVERAGE FINAL RULES (TiC)

Machine Readable Files

The TiC requires non-grandfathered group health plans and insurers to disclose on a public website information separate machine-readable files on

• In-network provider rates for covered items and services,
• Out-of-network allowed amounts and billed charges for covered items and services, and
• Negotiated rates and historical net prices for covered prescription drugs.

The machine-readable file requirements of the TiC are applicable for plan years (in the individual market, policy years) beginning on or after 1/1/2022. However, the Departments will defer enforcement of the requirement to make public the machine-readable files for in-network rates and out-of-network allowed amounts and billed charges until 7/1/2022. On 7/1/2022, the Departments intend to begin enforcing this requirement for plan years beginning on or after 1/1/2022. For plan years beginning after 7/1/2022, plans and insurers should post the machine-readable files in the month in which the plan year begins.

Departments will defer enforcement of the TiC’s requirement that plans and issuers publish machine-readable files relating to prescription drug pricing pending further rulemaking to be consistent with the CAA reporting requirements.

Price Transparency Tool

The TiC requirement for a price transparency tool is similar to the price comparison tool required by the CAA and is addressed in that section above.

Cheiron is an actuarial consulting firm that provides actuarial and consulting advice. However, we are neither attorneys nor accountants. Accordingly, we do not provide legal services or tax advice.