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The No Surprises Act’s transparency rules for health plans

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

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

The transparency requirements were originally anticipated to apply to all health plans for plan years beginning after Dec. 31, 2021. However, because so little guidance has been issued to date, the secretaries of Labor, Health and Human Services, and the Treasury departments have chosen to delay or scale back enforcement on most of the new transparency requirements until new guidance is published.

Brief explanations of each new transparency requirement and the anticipated extent of compliance and enforcement can be found below.

Annual reporting

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

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

Price comparison

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

Advanced explanation

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

To date, no regulations have been issued; therefore, compliance has been deferred until further notice.

Provider directory

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

Should a participant elect care based on inaccurate directory information, the plan may not impose a cost-sharing amount greater than the care received in-network. Moreover, payments must be applied against the participant’s deductible or out-of-pocket maximum as if the provider/facility was in-network.

To date, no regulations have been issued; for now, a plan will be deemed compliant if it applies the AEB cost-sharing, deductible and out-of-pocket rules described above.

Gag clause ban

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

Likely, beginning in 2022, plans will have to attest annually on compliance with the gag clause prohibition.

To date, no regulations have been issued; therefore, until then, plans should comply using a good-faith reasonable interpretation of the law.

Continuity of care

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

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

Balance billing

The NSA requires plan sponsors to make publicly available, post on a public website and include in each Explanation of Benefits with respect to an item or service, information in plain language on the prohibitions of balance billing, among other things.

To date, no regulations have been issued; until then, plan sponsors are expected to implement the statutory requirements based on good-faith reasonable interpretation of the law. To assist with compliance, a model disclosure notice may be used, found on the CMS website.

Barry F. Rosen is the chairman and CEO of the law firm of Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC, leads the firm’s health care practice and he can be reached at 410-576-4224 or brosen@gfrlaw.com.