Congress enacted the Consolidated Appropriations Act (CAA) in December 2020. Along with prior federal rules promoting hospital and health plan price transparency, the CAA promotes tools designed to improve health care purchasers’ decision-making with respect to health care services and network design, as well as to limit certain anti-competitive practices in provider-payer contracting. State employee health plans (SEHPs) are subject to many of these provisions and will need to take action to comply.  These provisions may also provide new opportunities for SEHPs to improve members’ experiences and to constrain cost growth.

Provisions to Improve Member Decision-making

Price Comparison Tools

The CAA requires group health plans to give enrollees’ access to a “price comparison” tool that allows them to compare the amount of cost-sharing they would be responsible for across providers. The CAA provisions were enacted subsequent to federal rules finalized in 2020 that also require group health plans to offer enrollees price comparison tools. Because the price comparison tools required by the CAA duplicate many of the requirements in the 2020 federal transparency rules, the federal agencies have indicated that they will publish further rules to clarify the requirements for health plans.

When does this go into effect?

Plans must have the price comparison tools available for plan year 2023 for the first 500 specified services. By plan year 2024, plans must have the price comparison tool available for all items and services.

What can state employee health plans do?

• Assess any existing price comparison tools to ensure they align with the requirements that will be in place in 2023, including requirements that the tools be made available online, on paper, or over the phone, upon request.
• Consider, where feasible, integrating quality data into the price comparison tool.
• Conduct member education on the tool and ensure that they can find it easily.
• Conduct user experience testing to ensure plan enrollees can easily navigate the tool and use it to identify high quality, low-cost providers.
• Where appropriate, ensure that the price comparison tool is integrated into your plan’s tiered network or reference pricing initiatives.

Advanced Explanation of Benefits (EOB)

The CAA requires health plans to provide an EOB to enrollees prior to their receipt of services. To inform the advanced EOB, the statute also requires providers to submit a good faith estimate of their costs to the plan within specified time limits after the service is scheduled. In addition to the cost estimate that the plan receives from the provider, the advanced EOB must include:

• The network status of the provider or facility;
• The contracted rate for the item or service (if in-network). If the provider is not in-network, then the document must inform the enrollee how they can find participating providers or facilities;
• A good faith estimate of the total amount of out-of-pocket costs the enrollee will be responsible for and its effect on their annual out-of-pocket maximum or deductible; and
• Disclaimers with respect to any medical management techniques used by the plan.

The advanced EOB must also include a statement that the good faith estimates are subject to change.

When does this go into effect?

This requirement went into effect on January 1, 2022, but the administration is delaying enforcement until after they have published regulations governing the necessary data transfers from providers to plans.

What can state employee health plans do?

• Discuss with your health insurance issuers or TPAs their preparations for receiving good faith cost estimates from providers and incorporating them into advanced EOBs for members.
• After the federal agencies provide additional guidance on the substance and form of the advanced EOBs, review your issuer or TPA’s drafts of these documents. Consider testing these drafts with focus groups drawn from your membership for readability and usability.

Provider Directories

The CAA requires group health plans to improve the accuracy of provider directories, provide them on a public website, and to establish a protocol for promptly responding to requests from members about a provider’s network status. The law also requires providers to submit timely updates to the insurers with whom they participate about any changes in their status. Provider directory information needs to be verified every 90 days and provider status needs to be updated within two days of notice from a provider. If a member relies on an inaccurate provider directory and unintentionally receives services from an out-of-network provider, the plan is required to hold the enrollee harmless to no more than the in-network cost-sharing amount. A provider who charge a member higher out-of-network cost-sharing amount must reimburse the member for the overpayment if the member relied on inaccurate provider directory information.

When does this go into effect?

These requirements went into effect on January 1, 2022. Although the administration intends to publish regulations to clarify the statutory requirements, plans are expected to comply now, using a good faith interpretation of the statute.

What can state employee health plans do?

• Discuss with your health insurance issuers or TPAs their policies and procedures for maintaining accurate and up-to-date provider directories, and make sure they have a clear protocol and the necessary customer support staff trained and in place to timely respond to member queries about a provider’s network status.
• Consider conducting periodic secret shopper or member surveys to routinely monitor the health insurance issuer or TPA’s compliance.
• When negotiating future contracts with health insurance issuers or TPAs, include compliance benchmarks and penalties.
• Ensure that your members receive clear and timely information – including within a reasonable time prior to service utilization – about their rights to an accurate provider directory, what they can do to determine a provider’s network status, and their out-of-pocket obligations if they unintentionally use out-of-network services after relying on an inaccurate provider directory.

Plan ID Cards

The CAA requires health plans to include members’ in-network and out-of-network deductible and any plan maximum out-of-pocket limits on ID cards. The ID cards must also include a phone number and website address where members can receive consumer assistance. The administration has said it will publish future guidance for plans on these ID card requirements, including instructions for plans with complex benefit designs.

When does this go into effect?

These requirements are effective beginning with the 2022 plan year. While plans await the administration’s detailed guidance, they are expected to provide the updated ID cards now, using a good faith interpretation of the statute.

What can state employee health plans do?

• Confirm with your issuer or TPA that member ID cards include the information required under the statute. If they do not, ascertain your issuer or TPA’s plans for introducing new ID cards that do comply.
• Conduct user testing on the ID cards to ensure that they are easy to read and understand. Ensure that ID cards comply with accessibility standards for those with limited English proficiency and those with disabilities.

Provisions Aiming to Improve Purchaser Decision-Making*

Eliminating Gag Clauses in Payer-Provider Contracts’

The CAA prohibits group health plans from entering into or renewing contracts with providers if it would preclude the plan from (a) disclosing provider-specific cost or quality information in a consumer-facing price comparison tool or other mechanisms; (b) obtaining de-identified claims data, and (c) sharing provider-specific cost or claims data with a business associate (as defined under HIPAA).

When does this go into effect?

This requirement went into effect on December 27, 2021. Although the federal agencies intend to publish guidance on how plans can demonstrate their compliance with this requirement, they are expected to implement it based on a good faith interpretation of the statute. The federal agencies will begin collecting attestations from health plans that they are in compliance during plan year 2022.

What can state employee health plans do?

• Request copies of existing provider contracts from your issuers or TPAs to assess whether any include prohibited gag clauses. To the extent any are up for renewal, ensure your issuer or TPA is vigilant about removing such clauses.
• Ensure that any new provider contracts do not include the prohibited gag clauses or any other restrictions on your access to provider-specific information on cost or quality or claims data.

Health Plan Price Transparency

Under federal regulations published in 2020, group health plans are required to make the following machine-readable files available on a public website, updated monthly:

• In-network rates for all covered items and services; and
• Out-of-network allowed amounts and billed charges for all covered items and services.

Self-funded plan sponsors are permitted to sign an agreement with their TPAs requiring the TPAs to complete these disclosures, but the plan sponsor is ultimately liable if the TPA does not comply fully with the requirements.

Separately, requirements that hospitals disclose their charges, including the rates they’ve negotiated with commercial insurers, went into effect on January 1, 2021. However, hospitals’ compliance with these transparency rules has been mixed.

When does this go into effect?

Group health plans must provide this data beginning on July 1, 2022.

What can state employee health plans do?

• Discuss with your issuer or TPA their plans for organizing and displaying the required data and ensure they are on track to be in full compliance by July 1, 2022.
• If not already the case, ensure that all TPA contracts include provisions stating that compliance with the federal rules means not only posting the relevant data, but ensuring that the data is accessible and usable for both plan administrators and members. Contracts should also include provisions committing your TPA to implementing improvements in response to feedback from end users. Consider implementing compliance benchmarks and penalties.
• Require TPA contracts with hospital providers to include provisions stating that the hospital will comply in full with the federal hospital transparency rules.
• Once your issuer or TPA has created the website through which their rate data will be posted, conduct your own assessment of its accessibility and usability. Submit recommended improvements to your TPA and include their responsiveness to such requests as factors in contract renewal.

Prescription Drug Transparency

Federal rules require group health plans to submit certain information to the U.S. Departments of Health & Human Services and Labor annually, including:

• General information regarding the plan or coverage;
• Enrollment and premium information, including average monthly premiums paid by employees versus employers;
• Total health care spending, broken down by type of cost (hospital care, primary care, specialty care, prescription drugs, and other medical costs, including wellness services). Prescription drug spending must be broken down into the share of costs for plan members, the employer, and the issuer (if relevant);
• The 50 most frequently dispensed brand prescription drugs;
• The 50 costliest prescription drugs by total annual spending;
• The 50 prescription drugs with the greatest increase in plan or coverage expenditures from the previous year;
• Prescription drug rebates, fees, and other remuneration paid by drug manufacturers to the plan or issuer in each therapeutic class of drugs, as well as for each of the 25 drugs that yielded the highest amount of rebates; and
• The impact of prescription drug rebates, fees, and other remuneration on premiums and out-of-pocket costs.

Federal rules require that plan sponsors generally will be required to submit this information aggregated at the state/market level, rather than separately for each plan.

When does this go into effect?

The CAA requires plans to begin submitting the required information by December 27, 2021, and to submit the information by June 1 of each year thereafter. However, in implementing these disclosure requirements, the Biden administration has said they will not conduct any enforcement action against a plan so long as it submits the required information by December 27, 2022.

What can state employee health plans do?

• Discuss with your issuer/TPA their timeline and processes for submitting the required information to HHS.
• Ensure that you as plan sponsor have sufficient opportunity to review the required disclosures prior to their submission to HHS.
• Consider how you will use the data required to identify and address cost drivers for your plan.

*Broker and Consultant Disclosures

The CAA requires brokers and consultants who reasonably expect to receive at least $1000 in direct and indirect compensation to disclose compensation of $250 or more. They must also provide a description of the services they rendered in exchange for the compensation. This provision applies to group health plans under ERISA but does not extend to non-federal government plans, such as state employee health plans. However, as a best practice, state employee health plans may want to consider adopting disclosure requirements for their vendors that mirror those required for commercial group health plans.

Under the CAA, broker and consulting services are defined broadly, and include TPAs, compliance service providers, benefit administration vendors, and PBMs. The disclosures they must make include:

• A description of the services provided to the covered plan;
• A description of all direct and indirect compensation, including standard, ongoing compensation, bonuses, finder’s fees, prepaid (advanced) commissions, payments made by third parties, incentive programs not solely related to the plan, among others;
• A description of all transaction-based compensation; and
• A description of any compensation payable in connection with termination and, if applicable, how any prepaid accounts may be refunded and calculated.

When does this go into effect?

For commercial group health plans, the disclosure requirements went into effect for any contracts or agreements entered into on or after December 27, 2021. Although the administration has stated that it will publish future rulemaking to implement the CAA provisions, in the meantime plans, brokers, and consultants are expected to comply using a good faith, reasonable interpretation of the statute.

What can state employee health plans do?

• Although state employee health plans are not subject to this CAA provision, consider requiring your vendors, including TPAs, PBMs, brokers, and benefit or compliance consultants to disclose their fees.
• Ensure that your vendor contracts include, or are amended to include, clauses outlining the substance, scope, and form of any required fee disclosures. In particular, the new federal fee disclosure requirement provides a powerful additional legal foundation for your TPAs and other vendors to provide you with deidentified claims data and information on the underlying financial transactions.
• Develop a strategic plan for the review and analysis of the disclosed data. In addition to using it to meet your fiduciary duty to ensure the plan is paying only “reasonable” plan expenses, your plan’s claims data can be a powerful tool for identifying cost-drivers and developing tactics to constrain health care cost growth.

Acknowledgements: This checklist was developed by the Georgetown University McCourt School of Public Policy Center on Health Insurance Reform, in consultation with NASHP’s Center on Health System Costs.