Transparency in coverage rule - Potential implications for self-insured health plans

Eversheds Sutherland (US) LLP
Contact

Eversheds Sutherland (US) LLP

On November 15, the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury (collectively, the “Agencies”) issued a proposed "Transparency in Coverage" rule that would require most employer-sponsored group health plans to disclose price and cost-sharing information to participants, beneficiaries and enrollees(collectively, “Participants”) upon request, before services are provided. The proposed rule was issued alongside a new final rule that will require hospitals to provide patients with information about the hospital’s "standard charges" beginning in 2021.

This alert focuses primarily on the provisions of the proposed rule that impact large self-insured group health plans.1 Comments on the proposed rule are due by January 14, 2020.

Background and Overview

The proposed rule stems from an executive order on health care transparency issued by the White House earlier this year, and is issued pursuant to sections 2715A and 1311(e)(3) of the Patient Protection and Affordable Care Act (the “ACA”). Section 1311(e)(3)(A) of the ACA provides that issuers offering health plans in the federal marketplace must make certain cost information available, and must make public certain data on claims payment policies, cost sharing and out-of-network coverage payments (among other information). Section 1311(e)(3)(D) extends similar disclosure requirements to non-grandfathered group health plans (Plans)2 and insurance issuers in the group and individual market (Issuers). Accordingly, the proposed rule would require Plans and Issuers to provide Participants with two types of disclosures: (1) a Cost Sharing Disclosure, which would consist of a real-time estimate of the enrollee’s potential cost-sharing liability for certain requested items and services covered under the plan analogous to the information that generally appears in an Explanation of Benefits (EOB), and (2) a Rate Disclosure, which would consist of information regarding negotiated rates for in-network providers and historical out-of-network allowed amounts.

The proposed rule could effect a significant change in the relationship between self-insured plans, Participants, and Third-Party Administrators (TPAs) or Administrative Services Organization (ASO) providers. As consumer-driven health plan designs become more prevalent, Participants have lamented the lack of access to standardized cost data that would allow individuals to make informed decisions when selecting a health care provider for a particular item or service. The Cost Sharing Disclosure would mandate that Plans not only provide such data, but also provide Participants with a clear estimate of their cost-sharing liability for covered items or services. In addition, the public disclosure of provider rate data may allow self-insured plans to compare their network rates to those offered to similarly situated plans in the same network and across competing network providers. To date, network providers have declined to share such information, and have often prohibited plans from disclosing individual plan rates to other plans or employers.

Note that the proposed rule would allow Plans to delegate responsibility and liability for Cost Sharing Disclosures to third parties, such as the Plan’s TPA or ASO provider. While Plans may also delegate responsibility for Rate Disclosures to a third party, the Plan would still be responsible for any liability associated with non-compliance. The proposed rule includes a non-compliance safe harbor, under which Plans and Issuers acting in good faith would be held harmless for an error or omission by a third-party with regard to certain disclosures.

Cost Sharing Disclosure

Content requirements

The proposed rule would require that, upon request and before services are rendered, Plans provide an enrollee with an estimate of the amount that the individual would be expected to pay for a covered item or service.3 The estimate would contain the following seven items, which the Agencies state are “similar to the content elements of an EOB”:

  • Estimated cost-sharing liability – the estimated amount the Participant is responsible for paying for a covered item or service under the terms of the plan or coverage as part of a deductible amount, coinsurance or a copayment.
  • Accumulated amounts – the amount of financial responsibility that the Participant has already paid at the time the request for cost-sharing information is made, either with respect to a deductible or an out-of-pocket limit or any utilized treatment limits (for example, the number of physical therapy visits used if the Plan includes a limit on such visits).
  • Negotiated rate – the amount (reflected as a dollar amount) that the Plan has contractually agreed to pay an in-network provider. In the case of a self-insured health plan, this would be the payment amount negotiated through its contract with the Plan’s TPA or ASO provider.
  • Out-of-network allowed amount – the maximum amount a Plan would pay for a covered item or service furnished by an out-of-network provider. For example, if the Plan has established an out-of-network allowed amount of $100 for an item or service from a particular out-of-network provider and the Participant is responsible for paying 30% of the out-of-network allowed amount ($30), the Plan would be required to disclose both the allowed amount ($100) and the Participant’s cost-sharing liability ($30).
  • Items and services content list (only for requests relating to bundled payment arrangements) – a list of each covered item and service included in any bundled payment arrangement, as well as the Participant’s cost-sharing liability for the covered items and services as a bundle.
  • Notice of prerequisites to coverage – a notice informing the Participant that a specific covered item or service may be subject to a prerequisite for coverage, such as concurrent review, prior authorization or step-therapy. This does not include medical necessity determinations.
  • Disclosure notice – an additional notice that includes a statement informing the Participant that: (1) out-of-network providers may “balance bill” the Participant, (2) charges for covered items and services may be different from those described in the estimate and (3) the estimated cost-sharing liability is not a guarantee that coverage will be provided.

Plans and Issuers would be permitted to include any additional information, including other disclaimers, as long as the additional information does not conflict with the information required to be provided. For example, Plans may choose to provide a disclaimer indicating how long a cost estimate will be valid based on the last date of the contract term for the negotiated rate. The proposed rule does not address potential liability for significant differences between the estimated amounts in the Cost Sharing Disclosure and the amount that the Participant is actually billed or charged once services are rendered.

The Agencies have developed model language that Plans and Issuers can use to satisfy the disclosure notice requirements described above.

Delivery methods

The Proposed rule would require that Plans and Issuers disclose the cost-sharing information described above either: (1) through a self-service tool that meets certain standards and is available on an internet website or (2) in paper form.

The web-based self-service tool must be “user friendly” and must allow users to search all in-network providers or input a specific in-network provider and search for cost-sharing information by billing code (for example, CPT Code 87804) or by a descriptive term (for example, “rapid flu test”). The tool would produce cost-sharing information and a cost-sharing liability estimate for the specified covered item or service provided by that in-network provider. In addition, the tool must also allow users to search for the out-of-network allowed amount for a covered item or service by inputting a billing code or descriptive term and the information necessary for the Plan or Issuer to produce the out-of-network allowed amount (such as the zip code for the location of the out-of-network provider).

For Participants without access to the internet, Plans and Issuers would be required to provide all of the content described above in paper form, upon request, and at no cost. The information must be mailed to the Participant no later than two business days after the Plan receives the request.

Rate Disclosure

In addition to the Cost Sharing Disclosure, the proposed rule would also require Plans and Issuers to disclose in-network provider negotiated rates and historical out-of-network allowed amounts through two machine-readable files posted on an internet website. This Rate Disclosure would be updated monthly and must be made available to the public (not just Participants).

The Rate Disclosure must include Plan information, billing codes used to identify covered items or services (and a plain language description for each code), and the negotiated in-network rates or out-of-network allowed amounts for covered items or services furnished by a particular provider during the past 90 days, provided the disclosure would not violate health information privacy laws. Plans that contract with third parties to provide allowed amount information must ensure that the third party is HIPAA-compliant, and may report aggregate amounts that reflect data from more than one plan or contract. The files must use a non-proprietary open format (not a PDF file, for instance).

The proposed rule notes that the Agencies are considering whether to also require Plans and Issuers to disclose both cost-sharing and rate information available to third-party technology innovators. Such innovators would be permitted to “compile, consolidate and present” data across employer-sponsored Plans in a usable format for consumers.

______

1The proposed rule would also allow insurance issuers to take credit for "shared savings" payments in their medical loss ratio (MLR) calculations.
2The proposed rule would not apply to excepted benefit plans, short-term limited duration coverage, or account-based plans, such as HRAs.
3Covered items or services would include provider visits, specific procedures, medical tests, drugs, facility fees, etc.

[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.

© Eversheds Sutherland (US) LLP | Attorney Advertising

Written by:

Eversheds Sutherland (US) LLP
Contact
more
less

Eversheds Sutherland (US) LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.