Biden Administration Delays Aspects of the “No Surprises Act”

On Friday, August 20, 2021, the Biden Administration issued FAQ guidance delaying key aspects of upcoming health plan price transparency and disclosure requirements slated to impact employer group health plans, health insurance carriers, and providers in the year ahead. The Administration will not enforce critical compliance deadlines related to the final Transparency in Coverage regulations and the “No Surprises Act” section of the Consolidated Appropriations Act of 2021 (CAA). Other sections of the CAA will only be subject to a good faith compliance standard until the Administration engages in future rulemaking.

Most of the impending requirements covered in this guidance apply to all health insurance carriers and employers that offer group coverage, regardless of their size, funding structure, or grandfathered health plan status. Employers with fully-insured coverage share compliance responsibility with their health insurance issuers. Self-funded and level-funded plans are responsible for ensuring compliance with the requirements. Most of these provisions were supposed to be effective December 27, 2021, or in plan or policy years starting on or after January 1, 2022.  Now they will be applied as follows:

Transparency in Coverage Final Rules:

• The requirement that health insurance issuers and group health plan sponsors publish machine-readable files of in-network reimbursement rates and out-of-network allowed amounts and billed charges on a public website is delayed from January 1, 2022, to July 1, 2022.
• Enforcement of the part of the health plan transparency regulation that requires plans and issuers to publish machine-readable files related to prescription drug costs is delayed for the time being while the Administration determines, through notice-and-comment rulemaking, whether the requirement remains appropriate.

Consolidated Appropriations Act of 2021 – No Surprises Act Requirements

1. Delay of enforcement for the internet-based price comparison requirements in the CAA from January 1, 2021, until January 1, 2023.   The new law’s requirement is largely duplicative of the internet-based self-service price disclosure requirement in the health plan transparency rule. So, the Administration intends to propose rules and seek public comment to determine if compliance with the transparency in coverage rule’s specifications could satisfy the analogous CAA requirements. Since the first phase of the final rule’s public disclosure requirement does not take effect until plan years beginning on or after January 1, 2023, enforcement will not start until then. Before that, the Administration will focus on compliance assistance.
2. The upcoming requirement that all issuers and group health plans disclose detailed pharmacy and health claims cost data to the federal government on December 27, 2021, and every June 1 after that is delayed pending the issuance of regulations or further guidance. Until then, the Administration strongly encourages plans and issuers to start working to ensure that they can begin reporting 2020 and 2021 data by December 27, 2022.
3. The CAA requires providers and facilities to inquire if the individual is enrolled in a health plan or health insurance coverage when they schedule a procedure starting in 2022. They will also need to give all patients, regardless of coverage status, reasonable estimates of expected charges for both the planned item or service and any items or services reasonably expected to be provided in conjunction with those items and services, including those offered by another provider or facility. The Administration plans to issue regulations for providers about how to give these estimates to people without health insurance coverage before January 1, 2022, so providers will need to comply with that part of the law on time.  However, the Administration will not have implementation rules ready for providers concerning how to provide estimates to insured individuals before January 1, 2022.  Until these rules are implemented, the Administration will defer enforcement of the requirement for people with health insurance coverage.  Any new rules will include a prospective applicability date that gives providers and facilities a reasonable amount of time to comply and provide appropriate estimates to insured individuals.
4. According to the CAA, group health plans and health insurance carriers should provide enrollees with “advance EOBs” before they incur a claim starting with plan years on or after January 1, 2022.  The “advance EOBs” trigger is the receipt of a good-faith estimate of charges from the insured’s provider.  The Administration announced that compliance with this section of the law is likely not possible by January 1, 2022.  They plan to undertake notice and comment rulemaking to implement this provision and will defer enforcement of the requirement until then. However, the guidance notes that HHS will investigate whether interim solutions are feasible for insured consumers, so employers that sponsor group plans will need to keep watching for more information on this topic.
5. Significant new surprise balance billing requirements for providers, group health plans, and insurance carriers will kick in with policy and plan years on or after January 2, 2022.  The Administration has already issued one interim final rule regarding the surprise billing requirements, and more regulations will follow. There is no delay of compliance responsibility for the surprise billing requirements. However, plans and issuers can implement these requirements using a good faith, reasonable interpretation of the statute until all related implementation rules are final.  Regarding disclosures that group plans and carriers need to make to plan participants about the surprise billing law, if a group or carrier uses the model notice provided as part of the surprise billing interim final rule and follows its related instructions, they will be compliant.
6. The law prohibits “gag clauses” in provider contracts with group health plans and health insurance carriers as of December 27, 2021.  “Gag clauses” are contracts that effectively prohibit plans and issuers from: (1) providing provider-specific cost or quality of care information or data to referring providers, the plan sponsor, participants, beneficiaries, or enrollees, or individuals eligible to become participants, beneficiaries, or enrollees of the plan or coverage; (2) electronically accessing de-identified claims and encounter data for each participant, beneficiary, or enrollee; and (3) sharing such information, consistent with applicable privacy regulations. The FAQ guidance issued last week clarifies that the Biden Administration will not be able to finalize implementation rules on this topic before December 27, 2021, and a good faith compliance standard will apply in the interim.  However, they will issue sub-regulatory guidance to explain how plans and issuers should submit their attestations of compliance and anticipate beginning to collect attestations starting in 2022
7. Beginning with policy or plan years on or after January 1, 2022, the new law specifies that group health plan sponsors and health insurance carriers need to conduct extensive efforts to verify the ongoing accuracy of their provider network directories.  Suppose an enrollee gets inaccurate information from a directory and incurs an out-of-network claim as a result. In that case, the carrier or plan may only be able to apply in-network cost-sharing.  However, the Biden Administration announced they would not publish final implementation rules for this requirement before the end of 2021.  Until regulations are final, if there is a directory error, they cannot require any more than in-network cost-sharing. They must also count those cost-sharing amounts toward any deductible or out-of-pocket maximum to stay in compliance.
8. The law includes a requirement that plans and issuers print clear information on health plan ID cards about all applicable deductibles and maximum out-of-pocket limitations for all plan years starting on or after January 1, 2022. Cards also must include a telephone number and website address for individuals to seek consumer assistance. However, the Administration intends to adopt implementation regulations. Until those rules are final, plans and issuers are expected to implement the ID card requirements using a good faith, reasonable interpretation of the law.
9. The requirement that carriers and group plans establish continuity of care protections to protect enrollees in instances when terminations of certain contractual relationships result in changes in provider or facility network status is delayed. The Administration does not expect to adopt implementation rules until after January 1, 2022. Until rulemaking to fully implement these provisions is adopted and applicable, plans, issuers, providers, and facilities are expected to implement the requirements using a good faith, reasonable interpretation of the statute.

Robert DeNinno, Jr.

Rob is an employee benefits expert with over 25 years of experience. He is the founder and principal of Precision Benefits Group, a leading provider of corporate benefits plans. He is a member of the Philadelphia Business Journal Leadership Trust and regularly contributes to the publication.