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New Proposed Federal Regulations Will Require More Cost‑Sharing Transparency by Group Health Plans

November 25, 2019

Overview

On June 24, 2019, President Trump issued Executive Order 13877, which is entitled “Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First.” The Executive Order directed the Departments of Labor, Health and Human Services (“HHS”), and the Treasury (the “Departments”) to propose regulations requiring group health plans and health insurance issuers to provide or facilitate access to information about expected out-of-pocket costs for items or services to patients before they receive care. Following through on the Executive Order, the Departments jointly released the proposed regulations on November 15, 2019.

Broadly speaking, the proposed regulations will require group health plans and health insurance issuers offering health insurance coverage in the individual and group markets to:

  1. Make available to participants (or their authorized representative, such as a provider) personalized, out-of-pocket cost information for all covered health care items and services. The information must be provided through an internet-based self-service tool, and in paper form upon request; and
  2. Make available to the public, including stakeholders such as consumers, researchers, employers, and third-party developers (a) the in-network negotiated rates with their network providers, and (b) historical payments of allowed amounts to out-of-network providers. The information must be provided through standardized, regularly updated machine-readable files.

The information to be provided upon request includes the following:

  • An estimate of the participant’s cost-sharing liability (including deductibles, coinsurance, and copays) for a requested covered item or service;
  • The accumulated amounts (i.e., the expenses counting toward a deductible or out-of-pocket limit) that the participant has incurred to date;
  • The negotiated rate, reflected as a dollar amount, for an in-network provider for the requested covered item or service;
  • The out-of-network allowed amount for the requested covered item or service, if the request for cost-sharing information is for a covered item or service furnished by an out-of-network provider;
  • If a participant requests information for an item or service subject to a bundled payment arrangement that includes the provision of multiple covered items and services, a list of the items and services for which cost-sharing information is being disclosed;
  • If applicable, notification that coverage of a specific item or service is subject to a prerequisite (such as a concurrent review or prior authorization);
  • A statement that out-of-network providers may “balance bill” a patient for the difference between a provider’s billed charges and the amount collected from the group health plan or insurer;
  • A statement that the actual charges for a covered item or service may be different from an estimate of cost-sharing liability, depending on the actual items or services the participant or dependent receives at the point of care; and
  • A statement that the estimate of cost-sharing liability for a covered item or service is not a guarantee that benefits will be provided for that item or service.

Comments from interested parties may be submitted to the Departments through January 14, 2020. The regulations will be effective for plan years beginning on or after one year after finalization.

For further information or questions regarding the proposed cost-sharing transparency regulation, please contact Wally Miller at 541-686-3299 or wmiller@schwabe.com.

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