Employers look to their broker partners to keep them informed
Here’s six key elements to discuss
BY MISTY BAKER
When it comes to legal and regulatory compliance, one of the key challenges for employers is keeping abreast of numerous changes that come through legislation, guidance and court rulings. Employers look to their broker partners to keep them informed in an ever-changing regulatory environment, so it is incumbent on brokers to provide expert guidance and direct clients to government tools and calculators that can help them meet their responsibilities when it comes to measurement and reporting.
On July 1, 2022, a new and game-changing phase of the Transparency in Coverage (TIC) rule went into effect, requiring most employer-sponsored group health plans to disclose cost-sharing information to plan participants, upon request, before services are provided. Under the rule, both employers and issuers (also known as insurance carriers) have responsibilities to publish or provide on request, certain types of plan information.
The goal of implementing transparency is to help plan participants make informed decisions on their health plan procedures and services. The past two years have highlighted the ways that unexpected medical bills and lengthy hospital stays can severely impact family finances, adding additional stress that compounds already difficult situations. Until now, most consumers have been in the dark when it comes to the cost of both their routine and unexpected health care costs.
For example, when being treated at an in-network facility, a patient may receive care from a doctor or specialist who is considered out-of-network, but the patient has no way of knowing that until the bill arrives. Or a doctor may refer a patient for an MRI at a particular facility that charges more than another nearby clinic charges for the same scan. The aim of the TIC is to shed light on these price variances to empower the consumer to make informed decisions about their healthcare dollars and better plan for large expenditures.
Here are six key elements of the TIC that brokers should be discussing with their clients:
Machine Readable Files (MRF)
Machine Readable Files (MRF) will require health plans or issuers to publish three, separate machine-readable files:
- Negotiated rates for all covered items and services between the plan or issuer and in-network providers
- Historical payments to, and billed charges from, out-of-network providers
- In-network negotiated rates and historical payment net prices for all covered prescription drugs at the pharmacy location level.
What brokers need to know:
“Publishing” means making the information available on a public website, not a company intranet or employee-only website. The reason for this is that spouses and dependents of employees who are covered by the group health plan must be able to access the information.
Brokers will need to educate and advocate to help clients navigate this directive. Consumers may need additional context and information, for example, to understand the difference between an allowable amount and a billed amount. Simply publishing the MRF may not be sufficient if the goal is to empower consumers with information.
While enforcement was deferred until July 2022 for the in-network and out-of-network files, further rulemaking is pending for the prescription drug file.
Price comparison tools
Price comparison tools and cost-share estimators will require health plans or issuers to have an internet-based, self-service tool that provides real-time, personalized, out-of-pocket cost information, based on the member’s plan for covered items and services furnished by a particular provider. For plan years beginning on, or after Jan. 1, 2023, the plan or issuer must disclose cost-share information for 500 shoppable items and services identified within the rule. For plan years beginning on or after Jan. 1, 2024, all covered items and services must be included in the cost-share tool.
What brokers need to know:
Like MRF, employers will need to consider the spirit of the rule, not just the letter of the law. A key question will be, how easy is this for the layperson to navigate? If the tool uses Current Procedural Terminology (CPT) codes, which are used to document medical, procedural and diagnostic services, it may be easier to develop and launch, but difficult for consumers to understand and use.
Employers should also be thinking of ways to educate and incentivize employees to use the tool once it is available. The implementation and education pieces will be critical in determining how valuable the tool is to the end consumer.
On July 1, 2022, a new and game-changing phase
of the Transparency in Coverage (TIC) rule went into effect, requiring
most employer-sponsored group health plans to disclose cost-sharing
information to plan participants, upon request, before services are provided.
Insurance ID cards
Insurance ID cards will now require health plans to include the amount of the in-network and out-of-network deductibles and out-of-pocket maximum limitations on the card itself. While some carriers and issuers were already including this information on their ID cards, this is now a requirement.
What brokers need to know:
Pending further rulemaking, implementation of compliant ID cards is based in good faith. Carriers and issuers have flexibility to design cards that comply as they see fit. At this time, there are no requirements on font, color, or placement of the required information.
Good Faith estimates
Healthcare providers and facilities will be required to provide a “Good Faith Estimate” for requested services three days in advance of the service and not later than one day after scheduling of service. The estimate should include the type of coverage that the patient is enrolled in and provide notification whether the patient has coverage.
An important provision of the Good Faith Estimate addresses notification for claims. Basically, if the individual is enrolled in a health plan or coverage, and is seeking to have a claim for the item or service submitted to the plan or coverage, the provider must supply this notification to the individual’s plan or coverage. If the individual is not enrolled in a health plan or coverage or does not seek to have a claim for the item or service submitted to the plan or coverage, the provider must furnish this notification to the individual.
What brokers need to know:
Enforcement has been deferred, with further rulemaking expected in late 2022. It’s not immediately clear what form the estimate should take. The federal government could provide a standardized form or providers may be free to create their own forms or letters, based on a set of government criteria.
The good faith estimate is really where transparency starts for consumers. By providing specifics on the costs and elements of service, as well as whether or not each element is covered by the patient’s plan, consumers can be more proactive about their healthcare spending. Transparency allows consumers to ask questions about alternative options or inquire about setting up a payment plan that spreads costs out over time.
“Good faith” is key in providers complying with this aspect of TIC. The estimate cannot be general, but should be specific to the patient’s service. The patient should be able to look at the details of their coverage and understand how costs will be covered by the plan they have. While the onus is on the provider to comply, employers should think about how they will educate group plan participants on good faith estimates and how they can use the information to make more informed healthcare decisions.
Advanced Explanation of Benefits (EOB)
Upon receiving a “good faith estimate” regarding an item or service, plans and issuers must create and share an Advanced Explanation of Benefits notification in clear and understandable language. The notification must include:
- The network status of the provider or facility
- The contracted rate for the item or service. If the provider or facility is not a participating provider or facility, the EOB will describe how the individual can obtain information on providers and facilities that are participating
- The good faith estimate received from the provider
- A good faith estimate of the amount the plan or coverage is responsible for paying, and the amount of any cost-sharing for which the individual would be responsible for paying with respect to the good faith estimate received from the provider
- Disclaimers indicating whether coverage is subject to any medical management techniques
Employers should also be thinking of ways to educate and incentivize
employees to use the tool once it is available.
The implementation and education pieces will be critical in determining how valuable the tool is to the end consumer.
What brokers need to know:
While good faith estimates and EOB documents are intended to clarify costs for consumers, they represent a substantial change in the types of itemized documents that consumers will be receiving from providers and carriers. Employees may be confused, thinking these items are bills that must be paid, rather than estimates.
Further rulemaking is expected in 2022. Though employers with self-funded plans should talk to their third-party administrator (TPA) or stop-loss carrier to understand how compliance will work and who will be responsible for which portions. Most self-funding employers cannot produce this level of detail without outside assistance.
Accurate provider directories
One can also expect more timely and accurate provider directories. Health plans will be required to have up-to-date directories of their in-network providers, which shall be available to patients online, or within one business day of an inquiry.
The plans must verify key data elements such as name, address, telephone, specialty and digital contact information, every 90 days and have a process to suppress providers from the directory that do not respond.
Additionally, plans must be made publicly available and include on each EOB, information on prohibitions on balance billing, information related to the applicable state law, the requirements applied and information on contacting applicable state and federal agencies.
Finally, health plans are required to respond to an individual who requests information on a provider’s network status through a telephone call within one business day, in writing electronically, or in print, per the individual’s request.
What brokers need to know:
This will greatly simplify the process for consumers who need to find a provider who is in-network and accepting new patients. It is incumbent upon the plan providers to create a process for updating directory information on a regular basis.
For consumers who prefer to contact their plan directly for information, carriers must respond within specific time frames, depending on the consumer’s preferred method of communications.
Keeping an eye on the future
Many industries have moved toward transparency in pricing — automotive, hospitality and airlines, just to name a few. So, it’s no surprise that with the financial pressures on consumers that these changes are coming in the benefits space. And, there is more on the horizon. Expect to see the same push for transparency with respect to prescription drug files, mental health coverage and more, all in the interest of helping consumers navigate the complex world of healthcare.
On July 1, 2022, a new and game-changing phase of the Transparency in Coverage (TIC) rule went into effect, requiring most employer-sponsored group health plans to disclose cost-sharing information to plan participants, upon request, before services are provided.
MISTY BAKER is an Affordable Care Act Compliance, Agent and Industry Advocate. She is the director of Compliance and Government Affairs at BenefitMall and an Affordable Care Act (ACA) compliance and agent advocate specializing in ACA, ERISA, FMLA, COBRA and legislative advocacy for more than 20 years. She is passionate about delivering real-world and easy to understand solutions for clients, agents and broker concerns in this ever-changing health insurance market.
Misty is currently serving as the 2022-2023 Legislative Vice Chair for the National Association of Health Underwriters (NAHU/NABIP), where she has been a member since 1999. In 2015, Misty was recognized as one of the Most Influential Women in Employee Benefit Advising, by Employee Benefit Advisor. She served in the local, state and national leadership and advisory programs, and has been awarded with more than 10 awards for legislative efforts, agent advocacy and leadership.
Misty is the happiest bride on the planet, marrying David Grafe in April 2018 and has four very entertaining kids: Connor 25, Austin 25, Lindsay 23 and Alec 21. She loves to watch Wheel of Fortune with David, garden, cook, travel, love on her 6-year-old dog Jack and create memories with her friends and family.
Fun Fact: Her license plate is INSNRD