Final transparency-in-coverage rules require group health plans and insurance issuers in the individual and group markets to disclose extensive price and cost-sharing information beginning in 2022. As part of this project, CMS has also added a shared-savings provision to the medical loss ratio (MLR) rules. 

This GRIST discusses the complex transparency-in-coverage and MLR shared-savings rules that group health plan sponsors will need to understand and prepare to bring their plans into compliance. A brief overview of the transparency rules is shown below. Download the 14-page print-friendly PDF to get in-depth coverage of the new transparency rules, including:

• Required disclosure methods and formats
• Required content elements
• Special issues related to prescription drug requirements
• Contracting with issuers, TPAs, PBMs and other vendors
• Enforcement
• Potential litigation

The full GRIST also covers the new MLR shared-savings provision, gives an update on the hospital transparency final rules and outlines next steps for employers.

Overview of new transparency rules

The new rules require most employer-sponsored group health plans and health insurance issuers to disclose price and cost-sharing information up front, giving enrollees estimates of any out-of-pocket expense they will have to pay to meet their plan’s cost-sharing requirements. Health plan sponsors and insurance issuers will also have to give patients and other stakeholders access to previously unavailable pricing information, using a standardized format that allows easy cost comparisons.

The statutory authority for the new rules derives from Section 2715A of the Public Health Service Act (PHSA), which says that group health plans and issuers must comply with Section 1311(e)(3) of the Affordable Care Act (ACA). That provision requires transparency in coverage and imposes reporting and disclosure requirements for qualified health plans on the public exchanges.

Excluded plans and benefits. Excepted benefits and expatriate plans typically aren’t subject to certain PHSA healthcare reform mandates, such as PHSA Section 2715A, so the new rules won’t apply, for example, to limited-scope vision or dental plans, retiree-only plans, employee assistance programs that don’t provide significant medical care, and certain fixed indemnity policies. The rules specifically provide that the transparency requirements also won’t apply to grandfathered plans, health reimbursement arrangements (HRAs) and other account-based plans (apparently regardless of excepted-benefit status), or short-term limited-duration insurance (STLDI).

No quality metrics for now. The proposed regulations requested comments about using provider quality measurements and reporting in the private healthcare market to complement cost-sharing transparency. While regulators received a number of comments supporting this idea, the final rules do not require any quality metrics. The agencies intend to consider the comments for future action and encourage plans to innovate with quality metrics to improve consumers’ healthcare decisions.

Key transparency disclosures. Most plans will have to make cost information available in two ways:

• Posting machine-readable files with pricing information on a publicly accessible internet site
• Providing a self-service tool for enrollees to obtain personalized out-of-pocket cost estimates

Machine-readable pricing files on the internet for public access

To facilitate price comparisons and consumerism in the healthcare market, health plans and insurance issuers will need to make three machine-readable files publicly available on the internet:

• In-network rate file
• Out-of-network allowed amount file
• Prescription drug file

These regularly updated, standardized files will contain, among other things, the plan’s in-network provider negotiated rates, historical payments of allowed amounts paid to out-of-network providers and prescription drug rates. The files must provide information for all covered items and services, including prescription drugs. As discussed later, each file must contain certain content elements.

Effective date. The files must be available for plan years beginning on or after Jan. 1, 2022.

Self-service cost-estimator tool for enrollees

Plans and issuers will need to provide an internet tool that enables enrollees to obtain personalized out-of-pocket cost estimates for in- and out-of-network healthcare items and services, including durable medical equipment and prescription drugs. Plans and issuers can limit the tool’s availability to enrollees and have no obligation to give access to employees or dependents who might become covered in the future. When making healthcare decisions, enrollees may choose to share their personal cost-sharing liability with a healthcare provider or authorize a provider to serve as their representative under ERISA’s claim procedure rules.

This tool will help enrollees understand how their plan determines cost-sharing amounts and facilitate comparison-shopping before receiving medical care. As discussed later, the tool must include certain content elements — generally, the same information found in a healthcare claim’s explanation of benefits (EOB). The rules don’t require outreach or education, but regulators encourage plans to promote awareness of the self-service tool and ways enrollees can use it to shop for lower-priced services.

Effective date. The self-service transparency tool will phase in over two years:

• Plan years beginning on or after Jan. 1, 2023. Plans and issuers must provide estimates for 500 items and services identified in Table 1 of the preamble to the final rules. Regulators have provided the required plain-language descriptions (e.g., stress test with echocardiogram) for these items and services, along with standard billing codes.
• Plan years beginning on or after Jan. 1, 2024. Plans and issuers must disclose estimates for all covered items and services.