By Jeffrey H. Brochin, J.D.
Final rule on transparency in health insurance coverage to allow plan participants, beneficiaries, or enrollees to obtain an estimate and understanding of the individual’s out-of-pocket expenses thereby allowing them to effectively shop for items and services.
HHS, along with the IRS and the Department of Labor, has issued a final rule titled "Transparency in Coverage" which sets forth requirements for group health plans and health insurance issuers in the individual and group markets to disclose cost-sharing information upon request to a participant, beneficiary, or enrollee, including an estimate of the individual’s cost-sharing liability for covered items or services furnished by a particular provider. Under the final rule, plans and issuers are required to make the information available on an internet website and, if requested, in paper form, thereby allowing the requestor to obtain an estimate and understanding of the individual’s out-of-pocket expenses and effectively shop for items and services (Final rule, 85 FR 72158, November 12, 2020).
Statutory background. The Patient Protection and Affordable Care Act (ACA) (P. L. 111–148) 2010, and the Health Care and the Education Reconciliation Act of 2010, reorganized, amended, and added to the provisions of the Public Health Service (PHS) Act relating to health coverage requirements for group health plans and health insurance issuers in the group and individual markets. The provisions required that group health plans and health insurance issuers offering group or individual health insurance coverage must comply with statutes that address transparency in health coverage, and they imposed certain reporting and disclosure requirements for health plans that seek certification as qualified health plans (QHPs) that may be offered on an Exchange. Furthermore, a plan or coverage that is not offered through an Exchange is required to submit the information required to the Secretary of HHS and to the relevant state’s insurance commissioner, and to make that information available to the public.
Information to be made available. The disclosure provisions of the statutes require a plan seeking certification as a QHP to make certain information (including the following) available to the public and submit it to state insurance regulators, the Secretary of HHS, and to the Exchange:
- claims payment policies and practices;
- periodic financial disclosures
- data on enrollment;
- data on disenrollment;
- data on the number of claims that are denied;
- data on rating practices;
- information on cost-sharing and payments with respect to any out-of-network coverage; and
- information on enrollee and participant rights under Title I of the ACA.
Cost-sharing disclosures. The statutes also require plans to permit individuals to learn the amount of cost sharing (including deductibles, copayments, and coinsurance) under the individual’s coverage that the individual would be responsible for paying with respect to the furnishing of a specific item or service by an in-network provider in a timely manner upon the request of the individual. At a minimum, such information must be made available to the individual through an internet website and through other means for individuals without access to the internet. Together the statutory provisions require the overriding majority of private health plans to disseminate a substantial amount of information to provide transparency in coverage.
Backed up by executive order. On June 24, 2019, President Trump issued Executive Order 13877, "Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First," which directed the Secretaries of the departments that subsequently issued the rule, to issue an advance notice of proposed rulemaking soliciting comment on a proposal to require health care 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 provided to patients before they receive care.
As the executive order further explained: "To make fully informed decisions about their health care, patients must know the price and quality of a good or service in advance." Yet, as the Executive order further noted, patients often lack both access to useful price and quality information and the incentives to find low-cost, high-quality care, and this lack of information is widely understood to be one of the root problems causing dysfunction within the U.S. health care system.
Items and services list. The final rule includes a table of 500 items and services along with their medical codes and a plain-language explanation to further assist individuals in identifying the items and services that they are paying for. The agencies issuing the final rule expressed the view that transparency in health coverage requirements will strengthen the U.S. health care system by giving health care consumers, researchers, regulators, lawmakers, health innovators, and other health care stakeholders the information they need to make, or assist others in making informed decisions about health care purchases. The final rule has an effective date of January 11, 2021.
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