Group Health Plan Transparency Requirements Under CAA (Pt.2)

In part one, we recapped a variety of requirements that take effect in 2022 plan years.

In part two, we are focusing on requirements that have not yet taken effect and what The Miller Group is doing to help our clients comply with them. The CAA requirements include (in order by due date):

• Make specific health plan data available in “machine-readable files” on public websites
• File reports regarding prescription drug costs, drug rebates and participant costs through a CMS portal
• Establish a consumer price comparison tool
• Provide Advanced Explanations of Benefits to participants who request them before moving forward with a particular medical service

Posting Machine-Readable Files

Group health plans are required to post detailed information online regarding what they pay healthcare providers for various health services. This is a new requirement that plans must complete by July 1, 2022.

The CAA requires health plans (for self-insured plans, this is the plan sponsor) to publicly post the following information in machine-readable files (MRFs):

• The plan’s in-network negotiated rates for healthcare providers;
• The historical out-of-network allowed amounts for healthcare providers; and
• In-network negotiated rates and historical net prices for all covered prescription drugs at the pharmacy-location level (currently delayed).

MRFs containing the necessary data must be posted on a “publicly available” website in a standardized format and updated monthly. Note that the website must be readily available to the general public, not just to employees or participants in the plan.

What is a machine-readable file (MRF)?

The regulations define “machine-readable file” as a file that: 1) contains a digital representation of data or information; and 2) can be imported or read by a computer system without human involvement. It appears most TPAs are using a file format called JavaScript Object Notation (JSON), which most people have never heard of and may have trouble even opening. (Quick tip: Try using Notepad to open.)

What is the point of posting MRF data?

By requiring the information to be made publicly available, the law is basically establishing a huge database of information about how much health plans pay for a wide range of services. Federal agencies expect the data to be used by researchers, regulators, lawmakers, consumer advocates, and businesses that provide consumer support tools and services. For example, they believe technology companies will use the data in developing healthcare pricing tools for consumers.

What do you need to do?

Group health plans are required to post the MRFs to a website that is “publicly available” and accessible to any person free of charge and without conditions (such as establishment of a user account, password or other credentials). For employers that offer a fully insured health plan, the carrier will handle this requirement and you don’t need to do anything.

For self-insured clients, the TPAs are generally posting MRFs to their own website.  Some are also asking clients to include a link on their own websites. This may also vary depending on the employer size. Contact your account team for additional information.

Pharmacy Benefits Reporting

Starting in December 2022, group health plans will be required to file annual reports regarding pharmacy benefits, prescription drug costs, drug rebates and costs of coverage to employers and participants. While this requirement applies to all group health plans, carriers and TPAs are likely to complete most of the filing or, at a minimum, provide the necessary data for the employer to do so.

Reporting of data for the 2020 and 2021 plan years is due by December 27, 2022 (although the deadline could be delayed again).

What information is required?

Group health plans will have to provide detailed information their spending on prescription drugs, including:

• Average monthly premiums paid by the employer/employees
• Overall spending by the plan across a broad range of expenses
• Top 50 most frequently prescribed brand drugs (including total number of claims paid for each)
• Top 50 most costly prescribed drugs (by total annual spending and the annual amount spent by the plan for each)
• The 50 prescription drugs with the highest increases in plan expenditures compared to the previous year
• Rx rebates relating to prescriptions paid by the plan, to whom they were paid, and any effect they had on premiums

How will the process work?

The relevant federal agencies have developed nine different templates for plans to use in reporting the necessary information, which will need to be filed through a CMS portal. Each template is designed to collect a different type of information.

At this point, we still have a number of unanswered questions regarding exactly how the process will work. Different carriers, TPAs and pharmacy benefit managers are assuming varying levels of responsibility for the process. Much of the information will need to be provided by the carrier/TPA, but some of it will need to be provided by the employer.

In addition, some TPAs are saying they will provide the data but not actually file the required templates. Other TPAs are saying they will file at least some of them.

How it all fits together is not clear yet. We are still gathering information on how different carriers and TPAs are handling this and will keep our clients advised in the coming months.

Consumer Price Comparison Tool

Starting with their 2023 plan year, group health plans will be required to provide price comparison information to plan members through an internet-based self-service tool (and in paper form on request). The tool must compare the amount of cost-sharing that an individual would be responsible for paying for specific medical services from different providers.

Fortunately, it appears the carriers and TPAs that The Miller Group works with are prepared to provide this tool starting in 2023. This means that generally, employers should be able to rely on their carrier or TPA to fulfill this obligation. We are continuing to communicate with them regarding their progress in developing the required tool and will let you know if anything changes.

Advanced Explanations of Benefits (AEOBs)

This is one of those legal requirements that is a good idea in theory but is quite complicated and difficult to execute. It requires group health plans to automatically provide the following information to a plan participant when a medical procedure or service has been scheduled:

• Whether the provider or facility is in-network or out-of-network
  • If in-network, the contracted rate for the service
  • If out-of-network, information about how to find in-network providers or facilities that could provide the service
• A Good Faith Estimate of how much the plan will pay the provider(s) for the service
• An estimate of the cost to the patient for the service/procedure
• The estimated amount of expenses already applied to the patient’s deductible and out-of-pocket limits
• Whether the proposed service is subject to medical management practices such as prior authorization requirements or step therapy for prescription drugs A disclaimer informing the patient that the advanced list of costs are only estimates

As with many other requirements, this will be the responsibility of the carrier for fully insured plans.

For employers that offer a self-insured health plan, it is technically their responsibility but the TPAs are generally agreeing to add it as a service to the plan.

Due to the complexity of this requirement for AEOBs, both the regulations and the deadline for compliance have been delayed indefinitely.

Next Steps

The CAA regulations can feel like a daunting mountain to climb, especially when human resource departments are already pulled in so many directions. The Miller Group will continue exploring the best ways we can help clients meet regulatory requirements. We are also keeping an eye out for new developments in the delayed pharmacy benefit reporting and AEOB requirements.

We will keep you updated when new information is available. In the meantime, you can always reach out to a member of your account team with questions or concerns.