The Consolidated Appropriations Act (CAA) was signed into law in December 2020 along with the adoption of the Transparency in Coverage (TIC) rule in December 2020. While implementation of the CAA and TIC will require a multi-year phased approach, the ultimate goal of the rules is to make healthcare costs clearer to plan participants.
What You Need To Know About The New Federal Rules
Here's a rundown of five key things and their expected timelines to help you prepare your business for the transformative changes set to take effect on patient pricing transparency.
1. Protection from surprise bills: Particularly in the case of emergency care and air ambulance, patients may receive bills from out-of-network providers even when the facility is in-network. The No Surprises Act, part of the CAA, requires group health plans to apply in-network cost-sharing for covered services and to calculate a group health plan participants responsibility using the median in-network cost for that service in the Metropolitan Statistical Area where they receive the service. This rule went into effect on January 1, 2022.
2. More cost sharing information on ID cards: The CAA requires health plan ID cards to display member cost-sharing information and provide a phone number and website for participants to find additional information. This went into effect on January 1, 2022, but federal agencies will be issuing further regulatory guidance on this mandate later this year. In the meantime, health plans must implement based on a reasonable, good faith interpretation of the CAA.
3. Price comparison tool: The TIC rule requires health plans to have an online tool to compare prices for 500 designated “shoppable” services. The CAA contains a similar requirement for a cost transparency tool. In August 2021, federal regulators combined the TIC and CAA mandates so they both take effect on January 1, 2023. The price comparison tool must include all items and services effective January 1, 2024.
4. Health services cost information and cost-sharing disclosure: The TIC rule requires health plans and issuers to post machine readable files for in-network negotiated rates, and historical charges and payments for out-of-network care on July 1, 2022. A requirement to post a machine-readable file for costs and spending on prescription drugs has been delayed indefinitely pending further rulemaking by federal agencies.
5. Equitable care for mental health and substance abuse: The CAA also included provisions intended to strengthen the Mental Health Parity and Addiction Equity Act. Specifically, the CAA requires plans to test, and document the results of their testing, to ensure any non-quantitative treatment limitations (NQTLs) do not restrict mental health and substance use disorder benefits any more than medical benefits. Empire had already been performing this self-assessment when the CAA rules went into effect in April 2021.
More Transparency Can Help Boost Health Outcomes And May Help Offset Costs Of Compliance
Overall, the new rules aim to create more healthcare pricing transparency for consumers, which in turn can improve outcomes, control costs, and enhance their total health journey. You’ll want to partner with an insurer that is committed to making this type of transformative impact on healthcare, like Empire.
These new rules also create additional reporting and regulatory requirements that mean employers will need to work closely with their health plan to ensure compliance.
With more cost awareness and the ability to shop around for some services, the rules may encourage employees to choose in-network care and lower-cost services for their medical needs. This may reduce healthcare costs and potentially offset the administrative costs of compliance.
Prepare your employees for any plan changes
As an employer, it will be important to proactively share information about cost-comparison tools, billing procedures, and employee options when it comes to choosing providers within their network. An innovative digital solution like Empire Link can help make this process easier and more transparent for employees.
Now is the time for you to educate your employees so they have a good understanding of their coverage and are aware of any of possible changes to your offerings over the next year. By using the resources currently available to them through health insurance mobile apps and websites like the Sydney app and empireblue.com, your employees can see plan changes so they can better avoid surprise medical bills and high healthcare costs.
New regulations are evolving requirements for healthcare pricing transparency. Visit our CAA/Transparency Resource Center to stay current on the way the provisions of the Consolidated Appropriations Act can apply to you and your business.