On December 6, 2020, we posted an article titled “RADICAL new transparency rules likely apply to your health plan in one year.” The regulations are a little more than 150 PDF pages long. The following is intended to provide a condensed, but more comprehensive, summary of the requirements described in our December 6, 2020 article.

January 1, 2022 – Three files disclosed

• For plan years beginning on or after January 1, 2022
• Applies to non-grandfathered health plans
• Public disclosure
• In-network provider rates for covered items and services
• Out-of-network allowed amounts
• Billed charges for covered items and services
• Negotiated rates and historical net prices for covered prescription drugs
• Must be made available on an internet website
• Three machine-readable riles – standardized format and updated monthly
• Date most recently updated clearly indicated
• Accessible to any person free of charge
• No conditions – cannot require establishing of user account, password, or other credentials, or submission of personally identifiable information to access the file

1. File #1 (in-network providers): The first file must show the negotiated rates for all covered items and services between the plan and in-network providers, except prescription drugs (see File #3 below). The file must include: (a) For each coverage option offered, the name and 14-digit Health Insurance Oversight System (HIOS), or, if the 14-digit HIOS identifier is not available, the 5-digit HIOS identifier, or if no HIOS identifier is available, the Employer Identification Number (EIN); (b) A billing code, in the case of prescription drugs must be an NDC (National Drug Code), and a plain language description for each billing code for each covered item or service under each coverage option offered by the plan; and (c) All applicable rates, which may include one or more of the following (1) Negotiated rates, (2) Underlying fee schedule rates, or (3) Derived amounts.
2. File #2 (out-of-network providers): The second file must disclose the historical payments to, and billed charges from, out-of-network providers. The file must include: (a) For each coverage option offered, the name and the 14-digit HIOS identifier, or, if the 14-digit HIOS identifier is not available, the 5-digit HIOS identifier, or, if no HIOS identifier is available, the EIN; (b) A billing code, for prescription drugs an NDC, and a plain language description for each billing code for each covered item or service under each coverage option offered by a plan or issuer; and (c) Unique out-of-network allowed amounts and billed charges with respect to covered items or services, furnished by out-of-network providers during the 90-day time period that begins 180 days prior to the publication date of the machine-readable file, except a plan or issuer must omit such data in relation to a particular item or service and provider when compliance with this bullet would require the plan or issuer to report payment of out-of-network allowed amounts in connection with fewer than 20 different claims for payments under a single plan or coverage.
3. File #3 (prescriptions): The third file must disclose the in-network negotiated rates and historical net prices for all covered prescription drugs. This file must include: (a) For each coverage option offered, the name and the 14-digit HIOS identifier, or, if the 14-digit HIOS identifier is not available, the 5-digit HIOS identifier, or, if no HIOS identifier is available, the EIN; (b) The NDC and the proprietary and non-proprietary name assigned to the NDC by the Food and Drug Administration (FDA) for each covered item or service that is a prescription drug under each coverage option offered by a plan or issuer; (c) The negotiated rates which must be: (1) Reflected as a dollar amount, with respect to each NDC that is furnished by an in-network provider, including an in-network pharmacy or other prescription drug dispenser; (2) Associated with the NPI, TIN, and Place of Service Code for each in-network provider, including each in-network pharmacy or other prescription drug dispenser; and (3) Associated with the last date of the contract term for each provider-specific negotiated rate that applies to each NDC; and (4) Historical net prices.

January 1, 2023 – Online shopping tool for 500 items (and January 1, 2024 for ALL covered items and services)

• For plan years beginning on or after January 1, 2023 (for the identified 500 items and services) (these have already been identified in the regulations)
• For plan years beginning on or after January 1, 2024 (for all covered items and services)
• Establishes price transparency requirements
• Applies to non-grandfathered health plans
• Does not apply to HRAs or other account-based group health plans
• Does not apply to short-term, limited-duration insurance
• Intended to give consumers real-time and accurate estimates of their cost-sharing liability
• Must be available in plain language
• Cannot require subscription or other fee
• Must be available through a self-service tool on an internet website
• Must provide real-time responses based on accurate cost-sharing information

Required Disclosures to Participants and Beneficiaries. At the request of a participant or beneficiary who is enrolled in a group health plan, the plan must provide certain information in a certain format.

Required Cost-Sharing Information:

• Estimate. An estimate of the participant’s or beneficiary’s cost-sharing liability for a requested covered item or service by a provider(s) that is calculated based on the information required in the paragraphs that follow below:
  • Accumulated amounts
  • In-network rate – comprised of the following:
    1. Negotiated rate, reflected as a dollar amount, for in-network providers, even if it is not the rate the plan uses to calculate cost-sharing liability
    2. Underlying fee schedule rate, reflected as a dollar amount, to the extent it is different from the negotiated rate
  • Out-of-network allowed amount – or any other rate that provides a more accurate estimate of an amount the group health plan will pay for the requested covered item or service, reflected as a dollar amount if the item or service is provided by an out-of-network provider, however in circumstances that a plan reimburses an out-of-network provider a percentage of the billed charge, the out-of-network allowed amount will be that percentage.
  • Bundled arrangements – if a request is made for an item or service subject to a bundled payment arrangement, a list of the items or services included in the bundled payment arrangement for which cost-sharing information is being disclosed.
  • Subject to a prerequisite – if applicable, notification that coverage of a specific item or service is subject to a prerequisite.
  • Notice in Plain Language – a notice that includes the following, in plain language:
    1. A statement that out-of-network providers may bill for the difference between a provider’s billed charges and the sum of the amount collected from the plan and from the participant in the form of a copayment or coinsurance amount (difference is balance billing) and the cost-sharing provided does not account for these potential additional amounts. This statement is only required if balance billing is permitted under state law;
    2. A statement that the actual charges for a covered item or service may be different from an estimate of cost-sharing liability provided, depending on the actual items or services received at the point of care;
    3. A statement that the estimate of cost-sharing liability for a covered item or service is not a guarantee that benefits will be provided;
    4. A statement disclosing whether the plan counts copayment assistance and other third-party payments in the calculation of the participant’s or beneficiary’s deductible and out-of-pocket maximum;
    5. For items and services that are recommended preventive services under 2713 of the PHS Act, a statement that an in-network item or service may not be subject to cost-sharing if it is billed as a preventive service if the plan or issuer cannot determine whether the request is for preventive or non-preventive; and
    6. Any additional information, including other disclaimers, that the plan determines is appropriate, provided the additional information does not conflict with the information required here.

Required methods and formats for disclosure:

• Internet-based self-service tool. Information disclosed per the requirements above must be made available in plain language, without subscription or other fee, through a self-service tool on an internet website that provides real-time responses based on cost-sharing information that is accurate at the time of the request. Plans must ensure that the self-service tool allows users to:
  • Search for cost-sharing information for an item or service provided by a specific in-network provider or by all in-network providers by inputting:
    • A billing code (such as CPT code 87804) or descriptive term (such as “rapid flu test”), at the option of the user;
    • The name of the in-network provider, if seeking information to a specific provider; and
    • Other factors utilized by the plan that are relevant for determining the applicable cost-sharing information, such as location of service, facility name, or dosage.
  • Search for an out-of-network allowed amount, percentage of billed charges, or other rate that provides a reasonably accurate estimate of the amount a plan will pay for a covered item or service provided by out-of-network providers by inputting:
    • A billing code or descriptive term, at the option of the user; and
    • Other factors utilized by the plan that are relevant for determining the applicable out-of-network allowed amount of other rate, such as the location a covered item or service will be sought or provided.
  • Refine and reorder search results based on geographic proximity of in-network providers, and the amount of the participant’s or beneficiary’s estimated cost-sharing liability for the covered items or services, to the extent the search returns multiple results.
• Paper method. Information disclosed per the requirements above must also be made available in plain language, without a fee, in paper form at the request of the participant or beneficiary. In responding to the request, the plan may limit the number of providers with respect to which cost-sharing information for covered items or services is provided to no fewer than 20 providers per request. The plan is required to:
  • Disclose the applicable provider-per-request limit to the participant or beneficiary;
  • Provide the cost-sharing information in paper form pursuant to the individual’s request;
  • Mail the cost-sharing information in paper form no later than two business days after a request is received;
  • If request is for other than paper, (for example, by phone or email), the plan may provide the disclosure through another means, provided the participant or beneficiary agrees and is fulfilled at least as rapidly as required for the paper method
• Special rule to prevent unnecessary duplication. A plan may satisfy the requirements by entering into a written agreement in which another party, such as a pharmacy benefit manager or other third party, provides the information required. Notwithstanding the preceding sentence, if a plan chooses to enter into such an agreement and the party with which it contracts fails to provide the information, the plan violates the transparency disclosure requirements.