February 3, 2021
Below is one example of how an SPBA membership will give you opportunities to problem solve with peers on challenging regulatory issues. The following invitation to the SPBA IT Task Force and the SPBA Operations Task Force requests participation in a brainstorming call to collaborate on the new Plan Coverage Transparency rules.
Invitation to Collaborate
SPBA would like to schedule a call with the SPBA IT Task Force and the SPBA Operations Task Force to explore how group health plans will meet the new requirements to disclose health benefit costs prior to services being rendered.
In March 2010, the ACA was signed into law. In that law was a provision on price transparency. In accordance with the ACA, the Trump Administration issued an executive order for the agencies to craft rules requiring group health plans to disclose health benefit costs prior to services being rendered. The executive order “was to allow patients to make fully informed decisions about their healthcare”, “to do this, consumers must know the price and quality of a good or service in advance.”
In response to the executive order, on Thursday, October 29, 2020, the agencies released the finalized Transparency in Coverage Rule. This rule places several requirements on plans and health insurance issuers.
First, most non-grandfathered group health plans and health insurance issuers will be required to make available to participants personalized out-of-pocket cost information, and the underlying negotiated rates, for all covered health care items and services, including prescription drugs, through an internet-based self-service tool and in paper form upon request. An initial list of 500 shoppable services as determined by the agencies will be required to be available via the internet based self-service tool for plan years that begin on or after January 1, 2023. The remainder of all items and services will be required for these self-service tools for plan years that begin on or after January 1, 2024.
Second, most non-grandfathered group health plans or health insurance issuers will be required to make available to the public three separate machine-readable files that include detailed price information:
- The first file will show negotiated rates for all covered items and services between the plan or issuer and in-network providers.
- The second file will show both the historical payments to, and billed charges from, out-of-network providers.
- The third file will detail the in-network negotiated rates and historical net prices for all covered prescription drugs by plan or issuer at the pharmacy location level.
- Plans and issuers will display these data files in a standardized format and will provide monthly updates. These files are required to be made public for plan years that begin on or after January 1, 2022.
SPBA has provided extensive feedback to the agencies on this rule in formal comments, including raising issues many self-funded plans will face in gaining real-time access to the information required to be disclosed under this rule.
Challenge for Group Health Plans
How will group health plans accomplish these requirements? There are questions that need to be considered, including:
- What kind of technology do you have today? Is it sufficient to meet the requirements above? What is the capacity of the technology?
- What are the terms of the service agreements with providers and networks in relation to confidentiality in terms of pricing?
- Think about the terms of the PBM agreements.
- What are the terms in the plan document on administration, in particular how do you calculate allowed amount.
- How much does the amount change since initial determination?
The SPBA team looks forward to the call and the great ideas that will emerge!