FAQs About Affordable Care Act Implementation Part 53 (Apr. 19, 2022)
Available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-53.pdf
The DOL, HHS, and IRS have issued FAQ guidance (Part 53) adopting an enforcement safe harbor for health plans and insurers reporting certain types of in-network rates under the transparency in coverage (TiC) regulations. As background, TiC final regulations issued in November 2020 include requirements for health plans and insurers to publicly disclose price information in machine-readable files for plan years beginning on or after January 1, 2022 (see our Checkpoint article). The disclosures must show (1) applicable rates for in-network providers; (2) allowed amounts and billed charges for out-of-network providers; and (3) prescription drug price information. Shortly after the TiC regulations were finalized, Congress passed the Consolidated Appropriations Act, 2021 (CAA), which, in addition to protections against surprise medical bills from nonparticipating providers or facilities, includes transparency requirements that overlap with the TiC regulations (see our Checkpoint article). Previous FAQs provided guidance on some of the CAA requirements and addressed the overlap and implementation timelines for the TiC and CAA transparency requirements (see our Checkpoint article). Among other things, the agencies deferred, until July 1, 2022, enforcement of the requirement to publicly disclose machine-readable files for in-network rates and out-of-network allowed amounts and billed charges.
This FAQ guidance explains that the TiC regulations require plans and insurers to publish an In-Network Rate File, which may include negotiated rates, underlying fee schedule rates, or derived amounts for covered items and services. The regulations provide that the In-Network Rate File must express rates as dollar amounts. However, after the regulations were published, questions arose about contract arrangements under which a dollar amount cannot be determined until a claim is made. To address these situations, the FAQs provide an enforcement safe harbor with two provisions. First, a percentage number in lieu of a dollar amount may be reported by plans and insurers that use percentage-of-billed-charges reimbursement arrangements under which it is not possible to accurately determine specific dollar amounts before a contracted item or service is provided. Second, plans and insurers may disclose in an open text field a description of the formula, variables, methodology, or other information necessary to understand the reimbursement arrangement if the arrangement is not supported by the schema provided in the agencies’ technical implementation guidance or requires additional context to be understood.
EBIA Comment: While this enforcement safe harbor provides narrow relief, every bit helps as the July 1 compliance date for machine-readable files approaches. The agencies indicate that they will monitor implementation of the machine-readable files requirements and may revisit this safe harbor in the future, including when underlying fee schedules become more widely available as providers transmit expected charges to plans and insurers in connection with advanced explanations of benefits required by the CAA. For more information, see EBIA’s Health Care Reform manual at Sections XXXVII.D (“Transparency in Coverage Cost-Sharing Disclosures”) and XXXVII.E (“Surprise Medical Billing Transparency Disclosures”). See also EBIA’s Self-Insured Health Plans manual at Sections XXVIII.H (“Transparency in Coverage Cost-Sharing Disclosures”) and XXVIII.I (“Surprise Medical Billing Transparency Disclosures”).
Contributing Editors: EBIA Staff.