March 10, 2021
There have been many questions around recent federal legislation related to price transparency in health care plans. Following are some key highlights and talking points.
Background
On Oct. 29, 2020, the Departments of Health and Human Services (HHS), Labor, and Treasury finalized the Transparency in Coverage final rule. The rule imposes new price transparency requirements on most group health plans and health insurers in the individual and group markets.
On Dec. 21, 2020, Congress approved the Consolidated Appropriations Act, 2021 and it was signed into law on Dec. 27, 2020. The Consolidated Appropriations Act, 2021 generally provides the annual funding for the federal government and contains several important rules giving further COVID-19 relief.
The legislation also contains provisions that apply to fully insured and self-funded health plans related to surprise medical bills, price transparency, health and dependent care flexible spending accounts.
What’s changing?
There are new transparency requirements for issuers in both the Transparency in Coverage final rule and the Consolidated Appropriations Act, 2021.
The Transparency in Coverage final rule changes include:
- Machine Readable Files: Insurers/group health plans must make available to the public three machine-readable files of: in-network rates, out-of-network allowed amounts, and prescription drug rates and historical net prices.
- Effective date: On or after Jan. 1, 2022
- Effective date: On or after Jan. 1, 2022
- Cost-Sharing Estimator Tool: Insurer/Group Health Plans must provide members personalized cost-sharing estimates for covered items and services and other information upon request.
- Effective date: Jan. 1, 2023, for Phase I (initial set of 500 shoppable items/services) and Jan. 1, 2024, for Phase II (all covered items and services).
- Effective date: Jan. 1, 2023, for Phase I (initial set of 500 shoppable items/services) and Jan. 1, 2024, for Phase II (all covered items and services).
- MLR Shared Savings Adjustment: Insurers may include “shared savings” payments in the Medical Loss Ratio (MLR) calculation for plans that pass along shared savings to members who choose care from a lower-cost, higher-value provider.
- Effective date: beginning with the 2020 MLR reporting year.
The Consolidated Appropriations Act, 2021 also includes requirements related to transparency in health care costs, some of which add to or overlap with the rules above. Key requirements include:
- Advanced Explanation of Benefits: In certain instances, insurers/group health plans must provide members with an explanation of benefits before a members’ health care appointment.
- Effective date: On or after Jan. 1, 2022
- Effective date: On or after Jan. 1, 2022
- Price Comparison Tool: Insurers/group health plans must provide a price comparison tool that allows members to compare cost-sharing for services among different providers.
- Effective date: On or after Jan. 1, 2022
- Effective date: On or after Jan. 1, 2022
- Accuracy of Provider Directories: Insurers/group health plans must have a process to verify and update provider directory at least every 90 days, respond to member network questions within one business day, and establish a database for the directory.
- Effective date: On or after Jan. 1, 2022
- Effective date: On or after Jan. 1, 2022
- ID Cards: Requires ID cards to include deductible, out-of-pocket maximum and customer service phone or website contact information.
- Effective date: On or after Jan. 1, 2022
Whom do these rules apply to?
- The Transparency in Coverage final rule applies to individual and group insurers and group health plans. This includes ASO and grandmothered plans. It does not apply to grandfathered plans.
- The Transparency provisions of the Consolidated Appropriations Act, 2021 generally apply to individual and group health insurers and group health plans. Because additional guidance from the government will be provided, our assessment of how the rules specifically apply to various market segments is ongoing.
Note: Blue Cross and Blue Shield of Montana (BCBSMT) will continue to monitor how the government may modify, delay or add to these rules. We expect clarification later this year.
What is BCBSMT doing to comply with these rules?
BCBSMT has a cross-functional team working to implement the requirements of the transparency-related requirements that stem from the final rule and Consolidated Appropriations Act. The team is also engaged in helping our customers in their compliance with these new requirements.
Because the specific requirements and timelines for compliance of both the final rule and the Consolidated Appropriations Act could be modified by future rulemaking from the federal government, BCBSMT will continue to monitor legal, legislative and regulatory developments, and will modify our implementation efforts accordingly.
Frequently Asked Questions
Q: What is BCBSMT doing to address the requirements in the Transparency in Coverage rule/ Consolidated Appropriations Act?
A: BCBSMT is working to implement the requirements of the Transparency in Coverage final rule and the transparency-related requirements of the Consolidated Appropriations Act. We have a cross-functional team in place to help support our customers’ compliance with these new requirements.
Q: When do the requirements of the Transparency in Coverage final rule and the Consolidated Appropriations Act need to be implemented?
A: Timing of each requirement varies, and we continue to seek guidance from the federal government on the timeline for implementation.
Q: What groups are required to comply with the Transparency in Coverage final rule?
A: The Transparency in Coverage final rule applies to individual and group insurers and group health plans. This includes ASO and grandmothered plans. It does not apply to grandfathered plans.
The Transparency provisions of the Consolidated Appropriations Act, 2021 generally apply to individual and group health insurers and group health plans. Our review of the specific impact of these rules to various market segments is ongoing.
Q: How will BCBSMT be supporting customers to implement the transparency regulations?
A: As part of this implementation program, we have a cross-functional team to develop our approach to support our group customers’ compliance with these new requirements. As we know more about our plans, we will be providing additional information to account management, broker and employer audiences.
Q: When will more information on the implementation plans be available?
A: As our implementation efforts progress and as the federal government provides more regulatory guidance on the law, we will provide additional information to account management, broker and employer audiences.
Q: How will you keep employers apprised of the status of BCBSMT’s plans to comply with these regulations?
A. As our implementation efforts progress and the federal government provides more regulatory guidance on the law, our account management team will communicate any pertinent changes to group customers, including how such changes may affect our clients’ plans and members. The account management team will work directly with groups in developing a communication strategy to notify and educate members about any relevant changes.
Our web-based employer portal, Blue Access for EmployersSM, features information on important legislative issues, news and updates, downloadable forms and information on products and services. We provide a newsletter to our brokers and employers to share important updates on employment and benefit laws, as well as other news and health and wellness information.
Q: How will BCBSMT work with vendors on price transparency?
A: As our implementation efforts progress and the federal government provides more regulatory guidance on the law, our account management team will communicate any pertinent details on engaging with customer vendors or what the requirements might be related to those engagements.
Q: How will BCBSMT support ASO employer groups’ compliance with the Transparency in Coverage rule?
A: As our implementation efforts progress and the federal government provides more regulatory guidance on the law, we will share additional details.
Q: What is BCBSMT’s position on the requirements of the Transparency in Coverage rule and the Consolidated Appropriations Act?
A: We support actions that reduce the cost of health care, improve coverage options, and provide necessary information to help our customers make informed health care decisions. We will work with regulators and legislators to provide clarity for the requirements and timelines of the Transparency in Coverage final rule and the Consolidated Appropriations Act. And we will help ensure the tools and resources enacted by this rule are helpful to our members in equipping them with meaningful, actionable information about their health care options.