Compliance Updates
The purpose of this notice is to provide an update to SBMA clients regarding new regulations currently in effect and future regulations that will be in effect in the next several months.
In 2020, the departments of Health and Human Services, Labor and the Treasury finalized the Transparency in Coverage rule requiring health insurers and group health plans provide the following two items.
- Publicly Available Machine-Readable Files: Insurers and plans will be required to make available to the public— including consumers, researchers, employers, and third-party developers—machine-readable files disclosing detailed information on the costs of covered items including negotiated rates for in-network providers, historical allowed amounts and billed charges for out-of-network providers and negotiated rates, and historic net prices for prescription drugs.
- Consumer Price Comparison Tool: Requires insurers and plans to create online consumer tools that include personalized information regarding members’ cost-sharing responsibilities for covered items and services, including prescription drugs.
Consolidated Appropriations Act (CAA): Congress passed into law the Consolidated Appropriations Act (CAA) requiring insurers and plans to submit cost data on pharmacy benefits and drug costs on an annual basis.
SBMA is making a good-faith effort to ensure all compliance requirements are met in a timely and cost-conscious manner. At this time there are no additional fees associated with these requirements for SBMA clients.
PATIENT-CENTERED OUTCOMES RESEARCH INSTITUTE (PCORI)
The PCORI fee, otherwise known as the Patient-Centered Outcomes Research Institute Fee, is an annual fee mandated by the Affordable Care Act (ACA) to fund research on the comparative effectiveness of medical treatments. The research institute helps patients, clinicians, purchasers, and policymakers make more informed healthcare decisions by advancing clinical effectiveness research. The PCORI Fee applies to specified health insurance policies with policy years ending after September 30, 2012, and before October 1, 2029, and applicable self-insured health plans with plan years ending after September 30, 2012, and before October 1, 2029.
Fully insured and self-insured health plans are required to pay the Patient-Centered Outcomes Research Institute (PCORI) Fee annually by July 31 of the year following the last day of a given plan year. If a plan is fully insured, the insurer pays the fee. For self-insured plans, the plan sponsors are generally responsible for paying the PCORI fee directly to the IRS (along with filing Form 720), irrespective of the number of employees (and their spouses and dependents) enrolled in the health plan.
CONSOLIDATED APPROPRIATIONS ACT – GAG CLAUSE PROHIBITION COMPLIANCE ATTESTATION
The Gag Clause Prohibition Compliance Attestation (GCPCA) is a critical development in healthcare policy designed to promote transparency and empower patients.
Its primary purpose is to eliminate restrictive practices that have historically obstructed open communication between healthcare providers and patients. The GCPCA is a response to growing demands for greater accountability within the healthcare industry, aligning with the provisions of Division BB of the Consolidated Appropriations Act (CAA). This attestation aims to protect patient rights and interests by ensuring that individuals have unhindered access to vital healthcare information.
FORM 5500 INFORMATION
Generally, Employee Retirement Income Security Act (ERISA)-governed group health and welfare plans with 100 or more participants at the beginning of the plan year must file Form 5500 annually. Included under this umbrella are different types of health plans, such as medical, dental, vision, and life insurance plans, as well as flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), short-term and long-term disability plans, and group legal plans.
The primary factor determining filing requirements is the number of participants. In short, if ERISA covers a given health and welfare plan and has 100 or more people participating, that plan will need to file Form 5500. (There are, however, some exceptions to the filing requirement, i.e., for small plans with fewer than 100 participants, governmental plans, and church plans.) For the most part, plans file the necessary Form 5500 series return/report along with required schedules and attachments.
HCRA NY POOL INFORMATION
The NYS Surcharge, also known as the New York State Health Care Reform Act (HCRA) surcharge, is a state mandate that adds to hospital bills in New York. Essentially, it’s a tax on hospital services, collected by hospitals and paid to the New York State Department of
Health. The surcharge applies to different types of insurance, including Medicaid, self-funded plans, and HMOs. The HCRA surcharge was implemented to help fund care for uninsured or underinsured patients and other public health initiatives in New York State that will hopefully enhance the quality and accessibility of healthcare services for all New York residents. HCRA is a prominent component of New York ́s healthcare financing laws, which govern hospital reimbursement methodologies and target funding for a multitude of healthcare initiatives.
Generally, the surcharge is passed along to the patient or their insurance company. Some insurance carriers may choose to pay the surcharge on behalf of their members, but this varies by carrier. As for the financial impact on patients, the surcharge may increase the amount they owe, but it cannot increase their total out-of-pocket liability beyond the maximum fixed dollar deductible. It would be prudent for group health plan sponsors to make sure they are aware of the HCRA rates and surcharges applicable to services at designated facilities and consult with their carriers or third-party administrators for more information.
CONSOLIDATED APPROPRIATIONS ACT – DRUG COST REPORTING
The stated intent of the Consolidated Appropriations Act (CAA) reporting requirement is to ensure the departments of Labor, Treasury, and Health and Human Services have sufficient information regarding prescription drugs to fully understand where plan assets are being spent. Reporting for the 2024 calendar year was due to the Centers for Medicare & Medicaid Services (CMS) no later than June 1, 2025.
The reporting requires various data points and coordination between third-party administrators (TPAs) and pharmacy benefit managers (PBMs).
SBMA has submitted the 2024 plan lists P2, data files D1 and D2, along with narrative response files on behalf of our clients. Our PBM has submitted data files D3-D8.
Transparency in Coverage – Machine-Readable Files
The Transparency in Coverage rules pertaining to machine-readable files were slated to go into effect January 1, 2022, but were delayed until July 1, 2022. The Prescription Drug File requirement has been delayed indefinitely.
While the Transparency in Coverage rules are not entirely clear on the subject, the consensus is that self-insured employers should post a link on their websites to where the machine-readable files are publicly available. The law refers to a “public website,” but does not specify where the website needs to be located.
SBMA is currently displaying the machine-readable files on our No Surprises Act resource page located at https://sbmabenefits.com/no-surprises-act-resource-page/.
The required file format for the machine-readable files is a JavaScript Object Notation File or .json file extension. SBMA is currently meeting this requirement by providing links to the .json files for both the MultiPlan and FirstHealth networks. While satisfying the requirement of the Transparency in Coverage final rule, the .json data files are not “user friendly” as they are ultimately intended to be a language-independent data interchange format.
Transparency in Coverage – Price Comparison Tool
The Transparency in Coverage Price Comparison Tool requirement is effective with plan years beginning on or after January 1, 2023, with an initial requirement insurers and plans provide benefit cost estimates for 500 items and services listed in the rule. Effective January 1, 2024, insurers and plans will be required to provide cost estimates for all covered medical items.
SBMA contracted with a third-party vender to offer a comprehensive price comparison tool that is available to enrolled members.