Health plans

The No Surprises Act Transparency Rules for Health Plans

The federal No Surprises Act (NSA) generally protects patients from receiving large, unexpected bills for out-of-network care. To implement the NSA, transparency rules were issued that require self-insured and insured health plans to include maximum deductibles and disbursements on physical or electronic health insurance ID cards.

These transparency rules also attempt to provide health plan participants with enough information to help reduce the risk of receiving surprise medical bills.

The transparency requirements were originally intended to apply to all health plans for plan years beginning after December 31, 2021. However, as so little guidance has been issued to date, the Secretaries of Labor, Health and Social Services and Treasury Departments have chosen to delay or scale back most of the new transparency requirements until new guidance is issued.

Below are brief explanations of each new transparency requirement and the intended scope of compliance and enforcement.

Annual Report

The NSA requires plans to report certain information to departments annually, including, but not limited to: the 50 most frequently dispensed brand name prescription drug pharmacies for claims for each plan and the number of claims paid by medication ; top 50 prescription drugs by plan based on total annual spend and annual amount spent per drug; the average monthly premium paid by the employer and the premium paid by the participant; and the impact of rebates, fees and other compensation that drug manufacturers have paid to a plan, its administrators or service providers on premiums for prescribed drugs.

To date, no regulations have been published and enforcement will be deferred until then. However, plan sponsors are asked to comply by December 27, 2022 for the 2020 and 2021 reporting years.

Price comparison

The NSA requires plans to offer plan members health care price comparisons over the phone and online. No regulations have been published; therefore, compliance has been deferred to 2023.

Advanced explanation

The NSA requires plans to provide participants with an Advanced Explanation of Benefits (AEB) once a participant receives a “good faith” cost estimate for an item or service from a healthcare provider/facility. The BEA must indicate, among other things, the following elements: the amount that the plan must pay and any cost sharing that the participant must pay; whether coverage for the item or service is subject to medical management techniques; and if off-net, information on how the participant can find out more about network vendors/facilities offering the same item or service.

To date, no regulations have been published; therefore, compliance has been postponed until further notice.

Directory of suppliers

The NSA requires plan sponsors to establish, verify, and update their provider/facility directory in a timely manner and establish a protocol for prompt responses to inquiries about a provider’s/facility’s network status.

If a participant chooses care based on inaccurate directory information, the plan cannot impose a cost-sharing amount greater than the care received in the network. In addition, payments shall be applied to the participant’s maximum deductible or outlay as if the provider/facility were in-network.

To date, no regulations have been published; at this time, a plan will be deemed compliant if it applies the AEB cost-sharing, deductible and disbursement rules described above.

Prohibition of the gag clause

The NSA prohibits plan sponsors from entering into any agreement with a provider, provider network, third-party administrator, or other service providers that could prevent the plan from, among other things, providing information about the cost or quality of provider-specific care.

Probably, starting in 2022, plans will have to certify compliance with the ban on the gag clause annually.

To date, no regulations have been published; therefore, until then, the plans must conform using a reasonable good faith interpretation of the law.

Continuity of care

The NSA requires plans to provide participants with continuity of care for certain treatments if, during treatment, a provider/facility’s contract with the plan is terminated or modified in a way that eliminates the covered treatment. Treatments subject to this requirement include treatment for any “serious and complex condition”, hospital care, scheduled non-elective surgery, terminal illness or pregnancy.

To date, no regulations have been published; until then, plan sponsors must enforce legal requirements using a reasonable, good faith interpretation of the law.

Invoicing of the balance

The NSA requires plan sponsors to make publicly available, post on a public website, and include in every benefit explanation for an item or service, plain language information about balance billing prohibitions, among other things.

To date, no regulations have been published; until then, plan sponsors are expected to implement legislative requirements based on a reasonable and good faith interpretation of the law. To facilitate compliance, a notice of disclosure template may be used, available on the CMS website.

Barry F. Rosen is the president and chief executive officer of the law firm Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC, leads the firm’s healthcare practice and can be reached at 410-576-4224 or brosen@gfrlaw.com.