The Affordable Care Act contains broad provisions requiring health insurers and group health plans to make substantial amounts of information available to the public to facilitate transparency in health care pricing, and several recent Executive Orders have also focused on the availability of health pricing information. In 2020, under the authority of the Affordable Care Act, the Departments of Health and Human Services, Labor, and the Treasury issued transparency in coverage regulations (often referred to as the “TiC Rules”), which require most health plans and health insurance issuers in the group and individual markets (“Plans and Issuers”) to publicly disclose health plan pricing and cost sharing information. The first deadline under the TiC Rules was originally set for January 1, 2022, but was delayed to July 1, 2022 in part due to the enactment of the Consolidated Appropriation Act (which contained additional, and somewhat overlapping, transparency in coverage rules).

Specifically, by July 1, 2022, the TiC rules require that each Plan and Issuer make two “machine readable files” (or “MRFs”) of pricing information available on its public website. Generally speaking, the MRFs that must be available must include (1) the payment rates negotiated between plans or issuers and providers for all covered items and services (the “In-Network File”), and (2) the unique amounts a plan or issuer allowed, as well as the associated billed charged for covered items or services furnished by out-of-network providers during a specified time period (the “Out-of-Network File”). (The deadline for a third file, which must contain pricing information for prescription drugs, was originally January 1, 2022, and has been extended indefinitely pending coordination with similar requirements under the Consolidated Appropriations Act.) Plans and Issuers are not required to disclose information that would violate health privacy laws. The MRFs must be updated monthly and clearly note the date they were last updated. The MRFs must be in a non-proprietary, open-standards format that is “platform independent” and available to the public without restrictions that would impede re-use, such as a JSON file. Microsoft Word, Microsoft Excel, and PDF files are not acceptable because they are proprietary formats.

Continue Reading Transparency in Coverage Deadline Looms – Are You Ready?

At long last, the Department of Labor has provided guidance on interpreting requirements imposed on group health plan fiduciaries as a part of the Consolidated Appropriations Act, or CAA. On December 27, 2020, Congress amended Section 408(b)(2) of ERISA through its enactment of the CAA. Section 408(b)(2) provides a prohibited transaction exemption for transactions between plans that are subject to Title I of ERISA and “parties in interest” with respect to such plan for the provision of services that are necessary for the establishment or operation of the plan, provided that the compensation paid by the plan to the provider is “reasonable.” One requirement for compensation to be considered reasonable for purposes of Section 408(b)(2) is that the plan fiduciary receive disclosure regarding the compensation received by the service provider. Prior to the CAA, these disclosure requirements only applied to certain retirement plan service providers. However, the CAA expanded these requirements to providers of brokerage or consulting services to group health plans who expect to receive $1,000 or more in direct or indirect compensation  (“Covered Providers”). In addition to disclosing the direct compensation received from a group health plan for its services, Covered Providers must also disclose indirect compensation received from third parties. The disclosure is intended to ensure that plan fiduciaries are informed as to the potential for conflicts of interests as a result of, and the reasonableness of compensation in connection with, third-party payments received by a Covered Provider. The new rules imposed by the CAA took effect on December 27, 2021.

Shortly after these provisions of the CAA took effect (and more than a year after the passage of the CAA), the Department of Labor (“DOL”) released Field Assistance Bulletin 2021-03 (the “Bulletin”) on December 30, 2021, which states that the DOL will focus its enforcement efforts on cases where Covered Providers are not acting in accordance with a good faith, reasonable interpretation of the applicable requirements of Section 408(b)(2). The Bulletin also includes guidance in the form of several questions and answers. The Bulletin confirms that while compensation arrangements relating to the provision of services to pension plans and group health plans differ in many respects, Covered Providers may look to prior DOL guidance issued with respect to pension plans (where applicable) to determine their own obligations with respect to Section 408(b)(2). As a result, the DOL states that it does not believe that comprehensive regulations are needed, but will instead monitor the situation to determine whether (and what) additional guidance may be needed.

Continue Reading DOL Provides Long-Awaited Guidance on Service Provider Health Plan Disclosures and Related Enforcement Policy