In late August, several federal agencies answered another set of frequently asked questions (FAQs) about how the pricing transparency requirements of the Consolidated Appropriations Act (CAA) are expected to work.


The FAQs acknowledge confusion about mandates and deadlines written into the CAA, passed in December 2020, that seem to overlap with rules found in other legislation. The three federal agencies that enforce various group health transparency mandates – the Department of Health and Human Services, the Department of Labor and the Treasury – issued the FAQs to clarify some guidance and also delayed enforcement of many parts of the transparency rules, which were to take effect in January 2022.


Several parts of the legislation are still undergoing revision. Employers who self-fund health plans and the benefits brokers who serve them will want to monitor parts of the CAA that could have a significant impact on how they offer health benefit plans to employees.


Here are three provisions that merit a closer look, as well as how Centivo views these provisions and to what degree our health plans already meet the proposed bar of healthcare price transparency.


The three provisions discussed below address:


  • Eliminating surprise billing
  • Ensuring transparency in pricing and coverage
  • Normalizing price and cost comparison tools


Eliminating ‘surprise billing’


The No Surprises Act bans surprise billing in various situations, including for emergency services. The act also includes various reimbursement and policy changes for hospitals, physicians and post-acute providers.


The No Surprises Act puts into place long-debated prohibitions against surprise billing for patients in covered out-of-network scenarios, such as when receiving emergency services. After the act’s provisions take effect on January 1, 2022, patients can expect to be charged at in-network rates for ER services even if they are performed by out-of-network providers.


Under the CAA, patients can expect to pay for emergency services as outlined in their health plan, whether providers are in-network or not. Payment disputes will be handled between insurers, providers and third-party arbiters.


Centivo’s take: This is an important step in protecting patients from potentially devastating financial losses as well as stressful and time-consuming negotiations/arbitrations. Centivo plans already have the same member cost-shares for in-network and out-of-network emergency services. Additionally, our plans are designed in part to dramatically reduce members’ need for and use of those services. A key feature of our core plan is free primary care, which acts as an incentive for members to seek out care when they need it, thereby reducing the need for emergency care. In fact, we’ve seen that ER visits for members on the Centivo plan are 24% below norms. And when members really do need emergency services, they know they have predictable and simple copays that you don’t need a degree in CPT codes to understand.


Ensuring transparency


The Transparency in Rules portion of the CAA covers a lot of ground. Perhaps the biggest news regarding transparency for the health benefits industry is the elimination of gag clauses from all formal agreements.


The CAA prohibits insurers and plans from making deals with providers (including an association or network of providers) or third-party administrators that include a gag clause, which is defined as directly or indirectly restricting or preventing insurers from making price or quality information available. Plans and insurers offering group coverage also cannot contract away their right to electronically access de-identified claims and patient medical information submitted by providers or data for enrollees. Providers can, however, place “reasonable restrictions” on public disclosure of this information, but insurers and plans must retain access to it.


This requirement went into effect immediately on the day the CAA was enacted, December 27, 2020. Under the CAA, compliance with the ban on gag clauses is enforced through annual attestations submitted by insurers and plans. Future guidance on compliance is expected to focus on the attestations that are due beginning in 2022.


Centivo’s Take: We believe this is another important step in shining light on the dark labyrinth of healthcare pricing. In fact, our contracts already comply with this provision. Nevertheless, like so many things in healthcare, the details surrounding transparency regulations are highly complex and could (as written) lead to some unintended negative outcomes. For a detailed look at the hospital pricing transparency issue, read my recent article in BenefitsPRO.


Normalizing pricing and cost estimation tools


These provisions seem to borrow the idea of online industry price aggregators that can be found in the auto/home insurance, travel and car sales businesses, among others.  Just as consumers know what they are paying before they buy home insurance or a new car, healthcare consumers should be able to calculate what they can expect to pay before receiving care. The spirit of these tools is to give consumers a sense of what they will owe – and the opportunity to shop for better prices, if they choose.


Insurers/group health plans must provide two tools for members. The first is a price comparison tool that allows members to compare prices for services among different providers. The second tool must provide members personalized cost-sharing estimates for covered items and services and other information upon request. The effective date is January 1, 2023 for Phase I (initial set of 500 shoppable items/services) and January 1, 2024 for Phase II (all covered items and services).


Centivo’s Take: Centivo believes that people shouldn’t need a tool to learn what a medical procedure will cost them. That’s why we built our plan to feature free primary care and clear, simple copays for everything else. These plan features make it very easy for members to understand their costs before they receive care. Though we will make these tools available as per the regulations, members will not need them to know what their costs will be for their care. Centivo’s plan members always pay the same copay per service, regardless of what providers bill for that service.


Transparency already a high priority


Transparency is a core belief at Centivo. Plan members always know what they will owe before they go to the doctor, thanks to the Centivo plan that feature no deductibles, free primary care and clear and simple copays. And for employers, we have a clear administrative fee with any other cost passed through with no markup, instead of profiting off hidden mark-ups or what is often known in the industry as “spread pricing.” It’s always just been the right thing to do. Now the CAA is moving towards making it the law as well.


Want to learn more about making healthcare price transparency work for your business? Contact Centivo today.


Note: Centivo is not a law firm and therefore the above commentary should not be considered legal guidance or counsel.

Alan Cohen