By Pension and Benefits Editorial Staff
The Departments of the Treasury, Labor, and Health and Human Services have jointly issued final rules that set 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 rules, plans and issuers are required to make this information available on an internet website and, if requested, in paper form, thereby allowing a participant, beneficiary, or enrollee (or his or her authorized representative) to obtain an estimate and understanding of the individual’s out-of-pocket expenses and effectively shop for items and services.
The final rules also require plans and issuers to disclose in-network provider negotiated rates, historical out-of-network allowed amounts, and drug pricing information through three machine-readable files posted on an internet website, thereby allowing the public to have access to health coverage information that can be used to understand health care pricing and potentially dampen the rise in health care spending.
The rules do not apply to grandfathered health plans, health reimbursement arrangements or other account-based group health plans or short-term, limited-duration insurance.
Medical loss ratio. HHS also finalized amendments to its medical loss ratio (MLR) program rules to allow issuers offering group or individual health insurance coverage to receive credit in their MLR calculations for savings they share with enrollees that result from the enrollees shopping for, and receiving care from, lower-cost, higher-value providers.
Disclosure of cost-sharing information. The final rule requires plans and issuers to disclose, upon request, to a participant, beneficiary, or enrollee for a covered item or service, the following:
- estimated cost-sharing liability,
- accumulated amounts,
- negotiated rates,
- out-of-network allowed amounts,
- a list of items and services subject to bundled payment arrangements,
- a notice of prerequisites, if applicable, and
- disclosures about balance billing, actual charges, and preventive services.
The Departments indicate these seven content elements generally reflect the same information that is included in an explanation of benefits after health care services are provided.
Method of disclosure. The cost-sharing information must be made available in plain language, without subscription or other fee, through a self-service tool on an internet website that provides real-time responses based on cost-sharing information that is accurate at the time of the request. Group health plans and health insurance issuers must ensure that the self-service tool allows users to search for cost-sharing information for a covered item or service provided by a specific in-network provider or by all in-network providers by inputting:
- a billing code (such as CPT code 87804) or a descriptive term (such as “rapid flu test”), at the option of the user,
- the name of the in-network provider, if the user seeks cost-sharing information with respect to a specific in-network provider, and
- other factors utilized by the plan or issuer that are relevant for determining the applicable cost-sharing information (such as location of service, facility name, or dosage).
In addition, the tool must allow users to search for an out-of-network allowed amount, percentage of billed charges, or other rate that provides a reasonably accurate estimate of the amount a group health plan or health insurance issuer will pay for a covered item or service provided by out-of-network providers.
The tool must allow users to refine and reorder search results based on geographic proximity of in-network providers, and the amount of the participant’s or beneficiary’s estimated cost-sharing liability for the covered item or service, to the extent the search for cost-sharing information for covered items or services returns multiple results.
Paper method. The cost-sharing information must be made available in plain language, without a fee, in paper form at the request of the participant or beneficiary. In responding to such a request, the group health plan or health insurance issuer may limit the number of providers with respect to which cost-sharing information for covered items and services is provided to no fewer than 20 providers per request. The group health plan or health insurance issuer is required to:
- disclose the applicable provider-per-request limit to the participant or beneficiary,
- provide the cost-sharing information in paper form pursuant to the individual’s request, and
- mail the cost-sharing information in paper form no later than two business days after an individual’s request is received.
To the extent participants or beneficiaries request disclosure other than by paper (for example, by phone or e-mail), plans and issuers may provide the disclosure through another means, provided the participant or beneficiary agrees that disclosure through such means is sufficient to satisfy the request and the request is fulfilled at least as rapidly as required for the paper method.
Disclosure to the public. The final rule requires plans and issuers to disclose pricing information to the public through three machine-readable files. The first file will show negotiated rates for all covered items and services between the plan or issuer and in-network providers. The second file will show both the historical payments to, and billed charges from, out-of-network providers. Historical payments must have a minimum of twenty entries in order to protect consumer privacy. And finally, the third file will detail the in-network negotiated rates and historical net prices for all covered prescription drugs by plan or issuer at the pharmacy location level.
Method of public disclosure. The machine-readable files must be publicly available and accessible to any person free of charge and without conditions, such as establishment of a user account, password, or other credentials, or submission of personally identifiable information to access the file.
The final rules define “machine-readable file” to mean a digital representation of data or information in a file that can be imported or read by a computer system for further processing without human intervention, while ensuring no semantic meaning is lost. The requirement ensures that the machine-readable file can be imported or read by a computer system without those processes resulting in alterations to the ways data and commands are presented in the machine-readable file, according to the Departments.
All machine-readable files must conform to a non-proprietary, open-standards format that is platform-independent and made available to the public without restrictions that would impede the re-use of the information. Therefore, because a PDF file format is proprietary, it would not be an acceptable file format in which to produce the files.
The Departments are developing technical implementation guidance for plans and issuers to assist them in developing the machine-readable files. The technical implementation guidance will be available online through GitHub, a website and cloud-based service that helps developers store and manage their code, as well as to track and control changes to their code.
Applicability. The requirement for the publicly available data files will take effect for plan or policy years beginning on or after January 1, 2022. Plans and issuers must make cost-sharing information available for 500 specified items and services for plan or policy years beginning on or after January 1, 2023, and must make cost-sharing information available for all items and services for plan or policy years beginning on or after January 1, 2024.
SOURCE: Transparency in Coverage Final Rule Fact Sheet (CMS-9915-F), October 29, 2020; https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/CMS-Transparency-in-Coverage-9915F.pdf.
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