We've gathered key information on the Transparency in Coverage (TiC) rules, No Surprises Act (NSA), and the broader Consolidated Appropriations Act of 2021 (CAA) to help you understand their potential impact on your organization.
The Transparency in Coverage (TiC) rules and the Consolidated Appropriations Act of 2021, which includes the No Surprises Act, Mental Health Parity, and Drug Cost Reporting, collectively referred to as "transparency," are the most impactful industry regulations since the ACA. There are numerous new administrative requirements for plans, TPAs, networks, and their vendors.
Qualified Payment Amount (QPA)
The Qualified Payment Amount (QPA) is used to determine member cost-share for items and services in which balance billing is prohibited under the No Surprises Act. The QPA is also a critical factor during arbitration. Plans must also present the QPA to providers in the Explanation of Payment (EOP), and be prepared to clarify how it was calculated upon request.
Circumstances when the QPA applies:
Member receives out-of-network emergent care and the services are otherwise covered by the plan.
Member receives non-emergent care provided in a participating facility by an out-of-network provider.
How the QPA is determined:
All-Payer Model Agreement (if the plan chooses to participate or state law requires it based on plan type).
State law (if the plan chooses to participate or state law requires it based on plan type).
Median contracted rate for the item/service in a specific geography. If there is insufficient contract data, the plan would use an eligible third party database or other means, which LaunchPad Health can help identify.
Independent Dispute Resolution (IDR)
Independent Dispute Resolution (IDR) may be triggered by the plan or the out-of-network provider/facility after the conclusion of the 30-day open negotiation period, which begins after plans pay or deny the claim. If an out-of-network provider disagrees with the plan’s reimbursement amount, a provider can utilize IDR to attempt to collect a higher reimbursement. The IDR entity is responsible for ultimately deciding the final payment owed to the provider. The arbiter cannot split the difference between offers. One side wins and the other loses. Loser pays the arbitration fees.
Provider Directory Accuracy
Plans must include the provider name, address, specialty, phone and digital contact information (e.g. email) in their directory and verify this information every 90 days. Providers or facilities that cannot be verified must be removed in a timely mannner. In addition, the plan must update their provider directory within 2 days of notification from a provider of any changes. The provider directory must be available on a public website and include both in-network professionals and facilities. If the plan incorrectly advises a member that a provider is in-network, the plan must limit the member’s cost share to what they would pay at the in-network benefit level.
Continuity of Care
If a member is receiving care from an in-network provider or facility and the provider or facility status changes to out-of-network, the plan must notify the member of the provider/facility’s termination from the network and their right to continued transitional care for a period of time if they meet the criteria established in the NSA law. The member can elect to continue to receive care from the provider at the in-network cost-sharing amount for 90 days, or the date when the member is no longer a continuing care patient, whichever is sooner.
Machine Readable Rate Files
Plans must produce three machine readable rate files. However, please note the Prescription Drug rate file has been indefinitely delayed by the federal departments.
In-Network Rate File:
This file should include rates negotiated with in-network providers and be published on the plan's website. It needs to be updated monthly, and include data for a 90-day period beginning 180 days prior to the publication date. Note, this file is published at the plan level (not the plan sponsor level).
Allowed Amount Rate File:
This file should include historical allowed amounts and billed charges for out-of-network claims and be published on the plan's website. It needs to be updated monthly, and include data for a 90-day period beginning 180 days prior to the publication date. Note, this file is published at the plan sponsor level.
Prescription Drug Rate File:
The federal departments have placed this provision on-hold for now. We advise plans to withhold implementation until further guidance is received.
Plan sponsors that offer mental health or substance use disorder benefits must provide a comparative analysis upon request to the Department of Labor (DOL) demonstrating parity with medical/surgical benefits. This requirement went into effect on 2/10/2021.
More specifically, plan sponsors must identify and demonstrate parity regarding any non-quantifiable treatment limitations (NQTLs). NQTLs are non-numerical limits on the scope or duration of benefits for treatment. Examples of NQTLs include preauthorization, concurrent review, standards for provider admission to the network, network adequacy, reimbursement methods, step therapy, and formulary design.
Plans are required to provide extensive documentation and a narrative analysis demonstrating parity from both a policy and day-to-day operational perspective. The analysis must be documented in advance and updated on a regular basis as changes are made to the plan.
In January 2022, the DOL released its year-end report to Congress claiming that enforcing compliance with NQTL will be a "top-priority" in 2022. We recommend plan sponsors carefully review their approach to comparative analysis and mental health parity given the complexity of these regulations and the number of plans that have already failed to produce a sufficient analysis.
Plans must make a price transparency tool available to members. This tool must reveal the estimated out-of-pocket cost to a member for a specific item or service rendered by a provider at a designated facility, if contract data is available. The estimate must take into account updated member data, such as deductible. The plan must also present certain information even if the provider is out-of-network. There are also requirements outlining the manner in which this data must be presented to the member. This requirement applies to 500 shoppable services designated by the federal departments in Jan 2023, and all remaining services in Jan 2024
Rulemaking is done for now. The departments expect full compliance by the enforcement deadline.
Prohibition on Surprise Balance Billing
Key Points:
Balance billing is prohibited in cases of (1) emergency care rendered by an out-of-network provider and/or facility, (2) non-emergency services rendered by an out-of-network provider at an in-network facility, and (3) out-of-network air ambulance services.
These requirements apply to reference-based-pricing plans in cases of emergency care and air ambulance (1 and 3 above).
Emergency care is defined as acute symptoms, such as severe pain, that would cause a prudent layperson to reasonably assume the individual's health is in serious jeopardy absent immediate medical attention.
Plans may make any initial payment they choose on these claims, or even deny. If the provider disagrees with the payment/denial, they cannot balance bill the member. Providers must instead negotiate with the plan directly. If both parties cannot come to agreement, the provider may initiate the Independent Dispute Resolution (IDR) process.
For certain pre-scheduled services, an out-of-network provider may ask a patient to sign a Patient Waiver prior to receiving out-of-network care. This waives the member's balance billing rights. In these instances, the provider must send a copy of the waiver to the plan and the member, and keep a record of the waiver for seven years.
Our Take:
This is a positive development for plans because it helps minimize member friction resulting from balance billing. However, plans must ensure they have a strong process in place to handle the Open Negotiation and IDR processes if the provider disagrees with the plan's reimbursement.
Rulemaking is done for now. The departments expect full compliance by the enforcement deadline.
Qualified Payment Amount (QPA)
Key Points:
The QPA is the median of contracted rates for a specific item or service in a defined service area and adjusted for inflation.
This is the amount plans use to calculate member cost-share for claims in which balance billing is prohibited. However, plans do not need to pay this amount to the provider. They may pay more, less, or deny the claim.
The QPA is utilized when an all-payer model agreement and state balance billing laws do not apply, which is most often the case for self-funded ERISA plans.
Our Take:
The QPA is complex and requires careful consideration depending on how your plan is structured. Many plans have differing strategies for how they derive their QPA. Some have enough contract data to derive the amount following the rules laid out by the federal departments. However, many do not have enough data or any at all, especially in the case of reference-based plans. LaunchPad Health can help you determine the right approach for your plan.
Rulemaking is incomplete. The departments expect compliance using a good-faith interpretation of the law.
Consumer Notice on Balance Billing Protections
Key Points:
Plans must notify members of their balance billing rights when sending an Explanation of Benefits (EOB) that contains a claim subject to balance billing protections.
The departments have provided a model notice (see below).
Our Take:
We recommend plans use the model notice for now. In some cases, it may be worthwhile to update parts of the model language for clarity, because the language as written is currently ambiguous. For example, plans may want to communicate that the EOB the member is viewing has a claim in which the protections apply, which is not clearly stated in the model notice. Keep in mind, there may be additional rulemaking forthcoming that will further clarify this requirement.
Rulemaking is done for now. The departments expect full compliance by the enforcement deadline.
Provider Notice on QPA and Negotiation Contact
Key Points:
Plans must share certain information with the provider upon making an initial payment for a claim subject to balance billing protections.
Specifically, if a plan determines a Qualified Payment Amount (QPA) applies to the claim, they must state that they have made this determination and reveal the QPA amount.
Plans must also provide a contact that providers may reach to initiate the Open Negotiation process.
Our Take:
This is a relatively straightforward requirement. The most important element for plans will be correctly identifying the payments in which these additional notifications to the provider would apply.
Resources:
LaunchPad Health has a template that clients may use to fulfill this requirement.
Rulemaking is done for now. The departments expect full compliance by the enforcement deadline.
Patient Waiver of Balance Billing Protections
Key Points:
An out-of-network provider may request that the patient waive their balance billing rights under two scenarios. First, once the patient has been stabilized after receiving emergency care, and second, prior to a previously scheduled out-of-network appointment.
The provider must submit a copy of this waiver to both the patient and the plan. The provider must also keep a record for seven years.
There are instances when providers cannot request a waiver, such as when a patient is receiving ancillary services (anesthesiology, pathology, and radiology).
Our Take:
It's not yet clear how often providers will result to using this waiver, and if they do, how they will share this information with plans. We recommend waiting to evaluate how this works in practice before developing a process.
Rulemaking is done for now. The departments expect full compliance by the enforcement deadline.
Independent Dispute Resolution (IDR)
Key Points:
IDR may be triggered by the out-of-network provider/facility after the conclusion of the 30-day Open Negotiation period, which begins after the plan pays or denies a claim subject to balance billing protections.
If an out-of-network provider disagrees with the plan’s reimbursement amount, a provider may utilize IDR to attempt to collect a higher reimbursement.
This type of arbitration is referred to as baseball style, because the arbiter may only select either the provider’s offer or the plan’s. They may not split the difference. The losing party pays the arbitration fees (about $300-600 per case).
As it currently stands, the arbiter is not obligated to select one offer over another. Therefore, plans must be prepared to justify why the QPA, or whichever offer they submit to IDR, is the correct amount. This was a recent change based on a court ruling in the United States District Court for the Eastern District of Texas. The arbiter was previously directed by the federal departments through rulemaking to select the offer closest to the QPA, unless an argument could be made to the contrary. However, in a reversal, the Court's ruling in Texas Medical Ass'n, et al. v. HHS mandates that the QPA not be the default amount. There are still several cases on this topic pending as well as the potential for appeal.
Our Take:
Plan's must establish a process to receive Open Negotiation requests from providers and any subsequent IDR requests. There are tight turnaround timelines for the IDR process. At a minimum, we recommend plans carefully consider who will respond to these requests and a way to ensure the timelines are met.
CAA - NSA
ID Card Transparency
Self-Implementing
N/A
1/1/2022
1/1/2022
Rulemaking is incomplete. The departments expect compliance using a good-faith interpretation of the law.
ID Card Transparency
Key Points:
Member ID cards must clearly display the member’s deductible (if applicable), out-of-pocket maximums, and the customer service telephone number and website address.
The deductible and out-of-pocket information must display both in-network and out-of-network, as applicable to the plan.
This information must be provided in both physical and electronic format.
Our Take:
This is a relatively straightforward requirement, however, it's worth highlighting that plans are required to have both physical and electronic ID cards. Some plans may not have an electronic equivalent in place yet, which this law will now require.
Plan sponsors that offer mental health or substance use disorder benefits must provide a comparative analysis upon request to the Department of Labor (DOL) demonstrating parity with medical/surgical benefits.
More specifically, plan sponsors must identify and demonstrate parity regarding any non-quantifiable treatment limitations (NQTLs). NQTLs are non-numerical limits on the scope or duration of benefits for treatment.
Examples of NQTLs include preauthorization, concurrent review, standards for provider admission to the network, network adequacy, reimbursement methods, step therapy, and formulary design.
Our Take:
In January 2022, the DOL released its year-end report to Congress claiming that enforcing compliance with NQTL will be a "top-priority" in 2022. We recommend plan sponsors carefully review their approach to comparative analysis and mental health parity given the complexity of these regulations and the number of plans that have already failed to produce a sufficient analysis.
Rulemaking is incomplete. The departments expect compliance using a good-faith interpretation of the law.
Updated and Accurate Provider Directories
Key Points:
Plans must verify provider data accuracy every 90 days (including the provider’s name, address, specialty, and phone and digital contact information) and remove providers that cannot be verified in a timely manner.
Plans must update the directory within 48 hours of notification of a provider or facility leaving the network.
If a provider is listed in the directory in error, the plan must pay any member claims resulting from this error as in-network.
Our Take:
Maintaining an accurate provider directly is extremely difficult. We recommend plans carefully evaluate their current processes and consider implementing a robust program to proactively identify errors. Given this new regulation, it's no longer enough to blame the providers for bad data. The plan must take responsibility for accurately representing their network.
Regarding processing errors as in-network, plans may find it difficult to build a proactive process that adjudicates claims as in-network when mistakes are made with their directory. Instead, we recommend this situation be resolved through an appeal.
CAA - NSA
Continuity of Care (CoC)
Timeline Unclear
N/A
1/1/2022
1/1/2022
Rulemaking is incomplete. The departments expect compliance using a good-faith interpretation of the law.
Continuity of Care (CoC)
Key Points:
Plans must develop a process to notify Continuing Care patients (defined below) when their provider or facility leaves the network.
Continuing Care patients are defined as someone:
undergoing a course of treatment for a serious and complex condition from a specific provider,
undergoing a course of institutional or in-patient care from a specific provider,
scheduled to undergo non-elective surgery from a specific provider, including receipt of postoperative care with respect to the surgery,
pregnant and undergoing a course of treatment for the pregnancy from a specific provider, or
or was determined to be terminally ill and is receiving treatment for such illness from a specific provider.
Plans must provide in-network benefits for 90 days, from the point of notification to the member, or until the course of treatment is complete.
Our Take:
For some plans, the most difficult aspect of implementing this process will be finding a way to adjudicating claims as in-network once the provider has left the network. Different claims systems have varying capabilities to handle this situation.
Plans will also need to ensure they are ready to consume network termination files if they are renting a third-party network.
CAA - Transparency
Prohibition of Gag Clauses
Self-Implementing
N/A
1/1/2022
1/1/2022
Rulemaking is incomplete. The departments expect compliance using a good-faith interpretation of the law.
Prohibition of Gag Clauses
Key Points:
This requirement bans clauses in contracts that would prevent plans from accessing and sharing cost and quality of care information.
The federal departments don't intend to release rulemaking on this requirement, because they have already shared significant guidance given previous laws on NQTL. However, they will require an annual attestation, which is discussed later under “Annual Attestation on Gag Clauses”.”
Our Take:
We interpret this requirement to mean gag clauses must be removed, even if the parties agree to no longer recognize this provision within an existing contract. Plans should begin this review as soon as possible given the potentially significant work to adjust affected contracts.
CAA - Transparency
Annual Attestation on Gag Clauses
Timeline Unclear
N/A
10/31/2022
10/31/2022
Rulemaking is likely to occur before the enforcement deadline. Plans are advised to await further guidance.
Annual Attestation on Gag Clauses
Key Points:
This requirement, which has yet to be finalized through rulemaking, will require plans to submit an annual attestation claiming they have no gag clauses in place.
Our Take:
The federal departments have yet to clarify how they would like these attestations to be submitted and what should be included. However, we advise plans to begin thinking about which individual will coordinate submission, and ensure they are educated on their responsibilities as rulemaking is released.
Rulemaking is done for now. The departments expect full compliance by the enforcement deadline.
In-Network Rate File
Key Points:
This file must include rates negotiated with in-network providers and be published on the plan's website monthly.
The data must span a 90-day period beginning 180 days prior to the publication date.
The file must be published at the plan level (not the plan sponsor level) and be prepared in a machine-readable format (either JSON, CSV, or XML).
Our Take:
The complexity surrounding production of the in-network file was made slightly easier after the federal departments recently announced a table of contents feature. Essentially, multiple different rate files can be referenced using a table of contents, which alleviates the need to combine into a single file. However, while this will make it easier to produce a file by the 7/1/2022 deadline, it does not make it any easier to deliver the price comparison tool, which will depend on a single list of rates.
The deadline for this requirement was originally 1/1/2022, however, the federal departments extended the enforcement deadline to 7/1/2022. Plans have been provided guidance by the federal departments on how to develop the file. See the link below.
Rulemaking is done for now. The departments expect full compliance by the enforcement deadline.
Allowed Amount Rate File
Key Points:
This file must include historical allowed amounts for items and services furnished by out-of-network providers, as well as billed charges, and be published on the plan's website monthly.
The data must span a 90-day period beginning 180 days prior to the publication date and be prepared in a machine-readable format (JSON, CSV, or XML).
This file must be published at the plan sponsor level. However, some plans may not have enough claims data to meet a claim threshold the federal departments have established to maintain patient privacy. In these instances, plans may ask their TPA to produce this file across the TPA's book of business.
Our Take:
Plans should consider how the claims threshold established by the federal departments affects their Allowed Amount file and determine in which cases they have sufficient data to report. Plans have been provided guidance by the federal departments on how to develop the file. See the link below.
Plans must report their air ambulance claims data to the Department of Health and Human Services for two consecutive years, 2023 and 2024, starting 90 days after the end of the year in which the claims were incurred. All 2022 claims would be reported on 3/31/2023 and all 2023 claims would be reported on 3/30/2024.
Our Take:
We recommend plans await publication of the final rules before implementing a process to provider the data requested.
Rulemaking is done for now. The departments expect full compliance by the enforcement deadline.
Reporting on Pharmacy Benefits and Drug Costs
Key Points:
Plans must submit an annual disclosure containing various data points on its membership, including the cost of prescription drugs for the plan, as well as its impact on member premiums. See the link below for a detailed list of items.
Our Take:
While this may appear to be a report the plan’s PBM should generate, the required data elements likely demand partnership between the TPA and PBM to successfully submit the report. We recommend initiating discussions with both entities as soon as possible.
Rulemaking is done for now. The departments expect full compliance by the enforcement deadline.
Price Transparency Tool
Key Points:
Plans must make a price transparency tool available to members. This tool must reveal the estimated out-of-pocket cost to a member for a specific item or service rendered by a provider at a designated facility if contract data is available.
The estimate must consider data specific to the member, such as their deductible and cost-share. The plan must also present certain information even if the provider is out-of-network.
This requirement applies to 500 shoppable services designated by the federal departments in 1/1/2023, and all remaining services in 1/1/2024.
Our Take:
We recommend beginning implementation as soon as possible. This requirement is exceedingly complex. Even if a plan already has a tool in place, most tools do not meet the threshold required to be compliant with this requirement. For example, most tools do not allow a member to look up any item or service and receive an accurate quote down to the level of a specific provider at a specific facility.
CAA - NSA
Advanced Explanation of Benefits (AEOB)
On-Hold
N/A
N/A
N/A
No guidance at this time
Advanced Explanation of Benefits (AEOB)
Key Points:
The Advanced Explanations of Benefits (AEOB) has been placed on-hold until further notice.
The AEOB requires insurers and providers to provide patients with an estimate of out-of-pocket expenses prior to any pre-scheduled service. This estimate would include estimated provider charge(s) for the scheduled service(s), the allowed amount, and any out-of-pocket expenses the member would be responsible for based on their current plan information, such as deductible and cost-share.
Our Take:
Plans should await further guidance from the federal departments before taking any action on this requirement.
TiC
Prescription Drug Rate File
On-Hold
N/A
N/A
N/A
No guidance at this time
Prescription Drug Rate File
Key Points:
The Prescription Drug Rate File has been placed on-hold until further notice.
The federal departments issued final rules on the Prescription Drug Rate File in Nov 2020 along with the other rate files, but later postponed this requirement in an Aug 2021 FAQ update. The file would have required plans to disclose negotiated rates and historical net prices for prescription drugs. The departments noted several stakeholder concerns regarding conflicting requirements between this provision and the CAA provision requiring reporting on pharmacy benefits and drug costs.
Our Take:
Plans should await further guidance from the federal departments before taking any action on this requirement.
Key Questions for Health Plans
The following questions summarize essential elements that plans, TPAs, and vendors must have in place prior to the compliance deadlines set by the federal departments.
Do you have an NQTL analysis in place and ready to be shared upon request?
Are you prepared to adjudicate NSA claims appropriately?
Do you have a QPA methodology in place and are you prepared to share it upon request?
Are you prepared to receive IDR requests from providers/facilities and manage the arbitration process?
Have you updated plan documents, ID cards, EOBs, and EOPs with the required information?
Are you verifying the accuracy of your provider directory every 90 days? Are you prepared to update the directory within 48 hours of receiving notification of a provider/facility termination?
Are you prepared to notify members of their Continuity of Care coverage, as appropriate, and adjudicate out-of-network claims as in-network for 90-days?
Will you be prepared to publish the In-Network and Allowed Amount machine readable rate files by 7/1/2022?
Will you have a price transparency tool in place by 1/1/2023? The tool must provide an accurate estimate of care for any item/service by any in-network provider, and include real-time data on deductible and cost-share.
Experts ready to help
Let's setup a free one-hour consultation to discuss your transparency needs. Whether you have one question, or need end-to-end implementation, put our expertise to work for you.