The Consolidated Appropriations Act of 2021 established protections for consumers related to surprise billing and transparency in health care.
The Hospital Price Transparency Rule of 2021 required hospitals to provide clear, accessible pricing information online about the items and services they provide. The Transparency in Coverage Rule requires health insurers and group health plans, including self-funded clients, to provide cost-sharing data to consumers.
Together, they allowed the Employee Retirement Income Security Act to put the “F” in “fiduciary,” according to some industry consultants who presented a webinar on how these federal regulations impact self-funded employer-sponsored health plans and how employers are required to act in a fiduciary capacity.
The goal of the CAA legislation is to improve transparency in four key areas, said Karen Handorf, senior counsel with Berger Montague. Those areas are:
Removal of gag clauses from service provider contracts.
Disclosure of direct and indirect compensation from all service providers.
Establish reporting requirements for pharmacy and prescription drug disclosures.
Required parity in substance abuse and mental health benefits.
Prohibition of gag clauses
Plan sponsor agreements with service providers must give access to cost or quality information so that the employer can show that employee cost related to claims are spent efficiently. Enrollees in the plan must be provided with access to information to help them make informed, cost-effective health care decisions. Service providers also must share information with the plan sponsor to identify waste through comparative analytics.
When gag clauses are removed, employers and employees will be able to compare providers and facilities together and choose the most cost-effective.
Under the Hospital Price Transparency Rule, hospitals must provide information on what they charge for various procedures, said Hugh O’Toole, CEO of Innovu. Employers and employees can see how much their health plan pays, what the cash amount would be for the procedure, and see the public rate data from carriers and third-party administrators.
“Employers need to understand what they’re paying, who they’re paying and what services they are receiving,” said Jamie Greenleaf, cofounder of OneVision.
Compensation disclosure requirements in the Consolidated Appropriations Act mean that brokers and those who provide services related to the health plan must disclose their sources of compensation and the services they provide. Examples of compensation include commissions, finder’s fees and incentive payments.
Prescription drug disclosure
For the first time, employers will be able to see the impact of drug manufacturers’ rebates and how they affect plan participants, Handorf said.
The Consolidated Appropriations Act requires plan sponsors to report certain information to the U.S. Department of Health and Human Services, the U.S. Department of Labor and the U.S. Department of the Treasury, including:
The 50 brands of prescription drugs most frequently dispensed and the number of paid claims for these drugs.
The 50 most costly prescription drugs by annual spend.
The 50 prescription drugs with the greatest increase in plan expenditures.
Information about total spending on health care services.
The average monthly premium paid by employers and employees.
The impact of rebates, coupons and other types of remuneration paid to the plan by drug manufacturers, as well as any reductions in premiums and out-of-pocket costs as a result of these rebates.
Mental health and substance abuse parity
Employers must make sure their plan is compliant with mental health and substance abuse parity laws, Handorf said. The Consolidated Appropriations Act requires plan sponsors to nonquantitative treatment limitations on mental health and substance abuse benefits to show parity with medical and surgical care.
Nonquantitative treatment limitations refer to network admissions criteria, medical management programs and access to substance abuse facilities.
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.