Departments Roll Back Enforcement Discretion in New Guidance on Transparency in Coverage Rules.

Bricker Graydon LLP

Bricker Graydon LLP

[author: Michaela Taylor]

Well, it was good while it lasted. On September 27th, the Departments issued new FAQs regarding implementation of provisions of The Transparency in Coverage Final Rules (TiC Final Rules). As noted in previous insight blogs, the TiC Final Rules require non-grandfathered group health plans and health insurance issuers offering non-grandfathered group and individual health insurance coverage to make cost-sharing information available to participants, beneficiaries, and enrollees through an internet-based self-service tool and in paper form, upon request. Since the issuance of the Final Rules, the Departments have provided several FAQs in which they announced enforcement discretion for certain reporting and disclosure requirements. While this has provided a much-needed grace period for many Plans, the most recent set of FAQs explain the intent of the Departments to roll back their decision to exercise enforcement discretion for two major TiC provisions.

The first section of the FAQ addresses the implementation of the prescription drug machine-readable file requirements. As originally enacted, the TiC Final Rules require group health plans and health insurance issuers to disclose on a public website in-network negotiated rates and historical net prices for covered prescription drugs. However, as explained in previous insight blogs, Plans were also required to submit certain prescription drug data for reference years 2020, 2021 and 2022 under a separate provision of the Consolidated Appropriations Act, 2021 (CAA). In light of these similar reporting rules, many plans and issuers questioned the additional prescription drug machine-readable file requirement, arguing that the two provision were potentially duplicative and overlapping reporting requirements. . In response, the Departments issued FAQs in July of 2022, deferring enforcement of the prescription drug machine-readable file requirement pending future rulemaking. However, the Departments have now determined that because the CAA requires disclosure of different and additional information than required in the TiC Final Rules, enforcement discretion is no longer warranted. The FAQ provides that enforcement of the rule will now be exercised on a case-by- case basis, but the Departments do intend to develop technical requirements and an implementation timeline in future guidance to account for the reliance on previous enforcement discretion.

The second section of the FAQ addresses the TiC “enforcement safe harbor” for percentage-of-billed-charges contract reporting. In previous FAQs, the Departments provided that an exercise of enforcement discretion may be necessary if it was extremely difficult or impossible for a plan or issuer to determine and report an applicable rate for specific items or services provided under “percentage-of-billed-charges” contracts if an exact dollar amount cannot be determined for an item or service prospectively. The Departments have now clarified that enforcement of the requirement to disclose certain rates as dollar amounts is a fact-specific determination exercised on a case-by-case basis, rather than a blanket safe harbor. Luckily, the FAQ notes that the Departments are unlikely to pursue enforcement action if a plan or issuer can demonstrate that compliance with the relevant provisions would have been extremely difficult or impossible.

While enforcement discretion for both provisions will now be a on case-by-case basis, Plan Sponsors should continue to monitor guidance from the Departments and prepare to complete any necessary requirements where feasible. Until new guidance is released, Plans and issuers that are unable to determine dollar amounts for the in-network rate element should continue to follow the existing technical guidance from CMS for percentage-of-billed-charges arrangements located here. Additionally, self-insured plan sponsors in particular should follow up with their TPA’s as further guidance emerges to discuss the timeline for creating a prescription drug machine readable file so that it can be posted on an accessible website.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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