Jennifer Spiegel Berman, JD, MBA – CEO of MZQ Consulting
Jessica Waltman – Principal of Forward Health Consulting
Two substantial new sets of final regulations were released on October 30, 2020, just days before the election. The first clarifies and refines certain federal policies in response to COVID-19. The second is the long-awaited transparency rules for health plans.
COVID-19 Testing Coverage and Transparency Requirements
Last Spring’s COVID-relief legislation requires all health plans to provide COVID-19 diagnostic testing without imposing any cost-sharing requirements for the duration of the current public health emergency. Under these rules, plans may not charge deductibles, copayments or coinsurance for such testing or related services. Plans are also prohibited from imposing prior authorization or other medical management requirements on testing and related services. For this purpose, “related services” include those provided during urgent care center visits, in-person and telehealth office visits, and emergency room visits that result in COVID-19 testing being ordered.
As a reminder, for these purposes, COVID-19 testing includes all in vitro diagnostic tests—a category that encompasses both “diagnostic” and “antibody” testing and incorporates molecular, antigen, and serological testing. More information from the FDA on the distinctions between these types of tests is available here.
In adding clarity to these rules, the new regulations require providers to make the “cash price” of their testing services readily available. This “cash price,” which is meant to be the amount an individual would pay for the services if they paid the provider directly (i.e., not through an insurance plan), must be posted on the providers website. Further, the cash price must be made available in an easily accessible manner, meaning that it must be free of charge, available without a user account or password, and available without having to provide personally identifiable information. Access to this information should prove helpful for health plans seeking to ensure they are charged reasonably for such tests. This rule is also particularly interesting in light of the final regulations on transparency for health plans discussed below.
COVID-19 Vaccines as Preventive Care
Congress also included provisions in the CARES Act requiring plans to pay for qualifying coronavirus preventive services without cost sharing. This rule expands upon the ACA’s general requirement that preventive care be paid for on a first dollar basis, but with several key distinctions.
One key distinction is that this coverage must be provided free-of-charge by all plans regardless of whether an in-network provider is used. In this case, if an out-of-network provider is used the plan must reimburse that provider “in an amount that is reasonable, as determined in comparison to prevailing market rates for such service.”
Another distinction is that, while still relying on the recommendations of the United States Preventive Services Taskforce and the Advisory Committee on Immunization Practices to define “preventive care,” it is not necessary for a COVID-19 vaccination to be classified as appropriate for “routine use” to meet the definition of “qualifying coronavirus preventive services.” Specifically, a COVID-19 vaccine will be able to qualify as soon as it becomes available to the public even if it is not listed for routine use by the public.
The third key distinction is timing. Generally, plans are required to cover newly added preventive services by the beginning of the second plan year following the change being announced. In this case, plans will be required to begin providing first-dollar coverage within 15 business days of a formal recommendation being issued. This means that carriers and third-party administrators will need to act FAST to update their claims systems.
It is also worth noting the special rules for qualifying coronavirus preventive services only apply during the public health emergency. However, even after the Secretary of Health and Human Services declares the public health emergency to be over, it is likely that COVID-19 vaccinations will be covered under the ACA’s preventive service rules. The only change being that the special rules described above will no longer be applicable.
Final Health Plan Transparency Regulations
Last year, President Trump issued an Executive Order urging his Administration to develop regulations to create greater healthcare price transparency for consumers. First came a price disclosure regulation aimed at hospitals, and then this new final regulation, creates new transparency requirements for health insurance issuers and group health plan sponsors. The measure requires almost all non-grandfathered health insurance plans, as well as employers that sponsor group health plans, to ensure the disclosure of significant medical care price information.
The requirements can be broken down into three parts by implementation date.
- By January 1, 2022, almost all non-grandfathered health insurance plans, as well as employers that sponsor group health plans must publicly disclose in-network provider negotiated rates, historical out-of-network allowed amounts, and drug pricing information through three machine-readable files posted on an internet website. These data files, which must be kept current, will allow the public to have access to broad medical care price information. The hope is that this data will be used to understand health care pricing and potentially dampen the rise in health care spending.
- Beginning with plan or policy years starting on or after January 1, 2023, almost all non-grandfathered health plan issuers and employer plan sponsors will have to make sure that plan participants can access personalized cost estimates for 500 designated shoppable services before they incur a claim. The hope is that the availability of such information will inspire responsible consumerism. All information must be made available on an internet website or, if requested, in paper form. The data health insurance issuers and group health plan sponsors must disclose includes:
- Estimated cost-sharing liability for specific procedures and conditions;
- The amount of cost-sharing liability a participant has incurred to date relative to their maximum out-of-pocket limit and any deductible;
- The negotiated rate the carrier or group plan has agreed to pay an in-network provider for the specific covered service the plan participant is considering;
- The maximum reimbursement amount that the carrier or group plan would pay to an out-of-network provider for a particular service;
- An explanation of any prerequisite for the person’s specific coverage request, such as step therapy or a preauthorization; and
- A notice warning about balance-billing to explain that the plan is merely providing personalized estimates, and actual costs may vary.
- By the start of plan or policy years beginning on or after January 1, 2024, virtually all non-grandfathered health plan issuers and employer plan sponsors will have to make the information listed above available to plan participants via an Internet-based search tool and on paper if requested for ALL covered items and services.
It is important to note that even though companies that offer health insurance coverage to employees generally will not have the ability to implement these transparency requirements independently, the rule does assign them direct liability. Employers that offer fully-insured group coverage can transfer liability to their health insurance issuer, although that transfer of risk will likely impact premiums. Employers that offer self-funded and level-funded plans may contract with their third-party administrator or other vendor to fulfill their transparency obligations. These employer groups can ask for indemnification via their vendor contracts, but still retain ultimate compliance responsibility. In addition to the transparency requirements, the rule gives fully-insured group and individual health plans credit in their medical loss ratio calculations for savings they share with enrollees that result from the enrollees shopping for, and receiving care from, lower-cost, higher-value providers.