On Dec. 27, 2020, President Trump signed into law a $1.4 trillion government funding package (the Consolidated Appropriations Act, 2021) and a $900 billion COVID-19 relief bill providing critical pandemic aid and an extension of government funding through Sept. 2021. The Consolidated Appropriations Act, 2021 [PDF] includes a number of healthcare-related provisions. This update addresses two of those provisions: ending surprise billing for emergency and involuntary out-of-network services and requiring new health plan reporting on prescription drug spending.

No Surprises Act – Ending Surprise Medical Billing

For individual and group health plans, effective for plan years beginning on or after Jan. 1, 2022, the No Surprises Act ends surprise medical bills by holding the patient harmless for out-of-network (OON) care that meets certain criteria (emergency services or certain non-emergency situations where patients do not have the ability to choose an in-network provider) and air ambulance services. This means that patients will only be responsible for applicable in-network cost-sharing amounts for the OON services received.

The legislation requires health plans to make payments to OON providers after an applicable bill is submitted, but does not specify the amount of initial payment, nor any claims requirements.  If providers dispute the payment made, the plan and provider will enter into a 30-day open negotiation period to settle the claim. If the required negotiation proves unsuccessful, then either party may initiate a binding “baseball-style” arbitration process (called an Independent Dispute Resolution), with the arbitrator selecting one of the final best offers submitted by each party. The arbitrator can consider a wide range of relevant information when determining a final provider reimbursement amount but is prohibited from considering billed charges of the provider, including usual and customary charges or rates, or those paid by public programs such as Medicare, Medicaid, TRICARE, or any state benefit program.

Under limited circumstances, OON providers are still permitted to balance bill patients if they give patients notice of their network status, an estimate of charges 72 hours prior to providing services, and the patient gives consent.

Price and Provider Network Transparency

The No Surprises Act includes additional provisions intended to help patients understand their potential cost responsibilities for the care, as well as the network status of their providers. For plan years beginning on or after Jan. 1, 2022, individual and group health plans are required to:

• Provide patients an Advanced Explanation of Benefits (EOB) for scheduled services or items at least three days prior to treatment.
  • The Advanced EOB must include (1) provider and/or facility network status, (2) the contracted rate based on billing/diagnostic codes submitted by the provider (for in-network providers only), and (3) good faith estimates of patient cost-sharing.
• Offer a price comparison tool for consumers and make the information available by phone.
• Maintain up-to-date online provider network directories.

Reporting Requirements on Pharmacy Benefits and Drug Costs

The Consolidated Appropriations Act, 2021 also creates a new reporting requirement for individual and group health plans. Beginning no later than one year after the law’s enactment, and by June 1 each year thereafter, health plans are required to report information on plan medical costs and prescription drug spending to the Secretaries of the Departments of Health & Human Services (HHS), Labor, and Treasury.

Information to be submitted includes:

• The 50 brand prescription drugs most frequently dispensed by pharmacies for claims paid by the plan and the total number of paid claims for each such drug.
• The 50 most costly prescription drugs with respect to the plan by total annual spending and the annual amount spent by the plan for each such drug.
• The 50 prescription drugs with the greatest increase in plan expenditures over the plan year preceding the plan year that is the subject of the report and, for each such drug, the change in amounts expended by the plan or coverage in each such plan year.
• Total spending on health care services includes: (1) hospital, health care provider, and clinical service costs, broken out for primary care and specialty care; (2) costs for prescription drugs; and (3) other medical costs, including wellness services.
• Any impact on premiums by rebates, fees, or other compensation paid by drug manufacturers to the plan or its administrators or service providers, including the amounts paid for each therapeutic class of drugs, and the amounts paid for each of the 25 drugs that yielded the highest amount of rebates and other compensation during the plan year.
• Any reduction in premiums and out-of-pocket costs associated with rebates, fees, or other compensation.
• Average monthly premium paid by employers on behalf of enrollees, as applicable, and that paid by enrollees.

HHS is then required to publish a report of aggregate prescription drug pricing trends and the impact of such spending on premiums. The first report is expected to be published 18 months after the initial health plan reports are submitted. Subsequent reports will be published biannually.

This week, the Department of Labor, Health and Human Services, and the Treasury issued a new set of Frequently Asked Questions (FAQs) confirming that group health plans and issuers must provide 100% coverage of over-the-counter (OTC) COVID-19 diagnostic tests beginning January 15, 2022.

The FAQs are a further interpretation of the coverage mandate required by the Families First Coronavirus Response Act (FFCRA), as amended by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Under this new guidance, 100% of the cost for COVID-19 tests purchased by an individual for diagnostic purposes on or after January 15, 2022, must be covered without cost-sharing or medical management requirements—even if the test was purchased OTC without a provider prescription or clinical assessment. This requirement continues for the duration of the national public health emergency.

The FAQs confirm that, per prior guidance that remains unchanged, the plan or issuer is generally not required to cover COVID-19 tests obtained for employment purposes or for other purposes that are not primarily intended for individualized diagnosis or treatment. Also, these new FAQs are separate from the U.S. government’s purchase of 500 million rapid tests and its commitment to mail tests free of charge to Americans who request them.

Per the FAQs, plans and issuers would be permitted to impose certain limitations that pertain to cost and quantity and that are intended to protect against fraud and abuse:

• Where the plan or issuer provides direct coverage of OTC COVID-19 tests (i.e., pays the seller directly and does not require members to seek reimbursement post-purchase), coverage cannot be limited to only those tests provided through its program or by its preferred/in-network sellers. However, the plan or issuer may limit reimbursement of tests purchased outside its direct coverage program to the lower of $12 or the actual cost of the test.
• With respect to OTC COVID-19 tests purchased during the public health emergency and without provider clinical assessment or involvement, the plan or issuer may limit the number of tests covered to no less than eight tests per covered individual per 30-day period (or calendar month).
• The plan or issuer may take action to prevent, detect, and address fraud and abuse, provided that these do not create a significant barrier to obtaining tests. Examples include requiring proof of purchase or an attestation that a test was purchased for the member’s personal use (or their covered dependent’s use).

Plans or issuers who have questions about these FAQs should contact their agent or insurance company with any questions.

As we monitor the spread of COVID-19, we want to assure you that we will continue to deliver the excellent service you expect from us. Here is the latest update from our team.

Consolidated Appropriations Act, 2021

On Sunday, December 27, President Trump signed a COVID-19 relief and government spending package called the Consolidated Appropriations Act, 2021. As part of the relief bill, the government has expanded upon earlier-provided relief for flexible spending accounts (FSA) and dependent care flexible spending accounts (DCA).

Employers may choose to adopt any or all of the following provisions; however they are not mandatory.

1. Rollovers – Allow employees to carry over all unused amounts in a FSA and/or DCA from the 2020 or 2021 plan year to the next plan year.
2. Grace Periods – Extend the FSA grace period from 2 1/2 months to 12 months following the end of the plan years for those plan years that end in 2020 or 2021.
3. Qualifying Dependent Age – Allow reimbursement for expenses incurred for a child through the plan year where the child attains age 14 (this helps address a situation where a child attained age 13 during the pandemic, therefore, the parent may not have been able to use the funds because school or daycare was closed).
4. Election Changes – Permit prospective mid-year election changes without regard to a change in status in order to accommodate these updates.
5. Reimbursements Post-Termination – Allow reimbursements through the end of 2020 or 2021 plan year in which participation ends, including any grace period or extended grace period even if those reimbursements were incurred after the employee was employed with the employer.

Deadline for Making Plan Amendments

Employers wanting to adopt one or more of the above provisions must amend their applicable plan documents by the last day of the first calendar year beginning after the end of the plan year in which the amendment is effective. This means changes for the 2020 plan year need to be adopted by December 31, 2021, and changes for the 2021 plan year need to be adopted by December 31, 2022.

This law strengthens the Federal Government and Health Care System’s Response.

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law. The $2 trillion package provides economic relief to individuals, health care providers, small businesses, and heavily affected sectors of the economy, and is intended to strengthen the federal government and health care system’s response to the COVID-19 pandemic. The bill passed the Senate unanimously on March 25 and passed the House on March 27 with an overwhelming voice vote.

Key economic provisions of the CARES Act include:

• Individual Stimulus Payments: Provides a one-time $1,200 refundable tax credit for individuals ($2,400 for joint taxpayers), plus $500 per child under age 17. The payment phases out for those with adjusted gross incomes of $75,000 or more ($150,000 for joint taxpayers). The rebates would not be counted as taxable income for recipients.
• $349 billion in Small Business Interruption Loans: Provides eight weeks of cash-flow assistance, from February 15, 2020, through June 30, 2020, for qualifying businesses (fewer than 500 employees, or the small business size standard associated with that industry, includes franchises, sole-proprietors, and self-employed), available through existing SBA-certified lenders. Details and instructions are expected to be released by the Small Business Administration in the next 15 days.
• Allowable uses include costs related to group health care benefits and insurance premiums, and loan amounts are forgiven for amounts paid towards payroll costs, including payment of group health benefits.
• $500 billion in Treasury Loans to Severely Stressed Sectors of the Economy: Provides the Treasury Secretary $500 billion to make loans, loan guarantees, and other investments to support heavily affected industries, States, and municipalities for direct or indirect losses as a result of the coronavirus. Details and instructions are expected to be released by the Treasury in the next 10 days.
• Unemployment Insurance and Grants: Creates a temporary Pandemic Unemployment Assistance program through December 31, 2020, to provide payment to those not traditionally eligible for unemployment benefits. Provides up to $600/week to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to four months.
• Short-Term Compensation Programs: Provides $100 million in federal grant funding to support short-term compensation arrangements, where employers can reduce employee hours instead of laying off workers and impacted employees will receive a prorated unemployment benefit.
• Payroll Tax Credit: For qualifying employers whose operations were fully or partially suspended, or whose gross receipts declined by more than 50%, provides a fully refundable payroll tax credit for 50% of wages paid up to $10,000 during the public health emergency.

Healthcare-related provisions include:

• Aid to Health Care Institutions: $100 billion available to eligible health care providers and hospitals for healthcare-related expenses and lost revenues directly attributable to COVID-19. Eligible entities include public entities, Medicare or Medicaid suppliers and providers, and for-profit and not-for-profit entities as specified by the Secretary of Health and Human Services (HHS) that provide diagnoses, testing, and care for individuals with possible or confirmed cases of COVID-19.
• COVID-19 Vaccine Coverage: Requires commercial insurers to cover any qualifying coronavirus preventive service (i.e., vaccines) defined by the U.S. Preventive Services Task Force. Requires Medicare and Medicare Advantage organizations to cover any COVID-19 vaccines with no cost-sharing.
• COVID-19 Testing Coverage: Clarifies existing law requiring all COVID-19 testing to be covered by group health plans and individual market issuers without cost-sharing, including those tests without an emergency use authorization by the Food and Drug Administration (FDA).
• In early March, Cigna voluntarily announced it would waive cost-sharing for COVID-19 testing and office visits related to testing for our members through May 31.
• Payment of COVID Tests: Requires commercial insurers to pay either: (1) the rate specified in a contract between the provider and the insurer in effect before the public health emergency was declared, throughout the duration of the public health emergency; or (2) if there is no contract, a cash price posted on a public website by the provider, or the plan may negotiate a rate lower than the cash price. Imposes civil monetary penalties on providers that do not post the price on a public website.
• 90-Day Fills and Refills: Requires Medicare Part D and Medicare Advantage plans to allow fills and refills of covered Part D drugs for up to 90-days during the public health emergency.
• Telehealth Expansions: Provides $200 million to the Federal Communications Commission (FCC) to support the efforts of health care providers to provide telecommunication services, information services, and devices to enable telehealth services.
• Telehealth and High-Deductible Health Plans (HDHPs): Establishes a safe harbor for HDHPs that provide benefits for telehealth and other remote care services before patients satisfy the applicable minimum deductible.
• Over-the-Counter Medical Products and HDHPs: Allows patients to use health savings account (HSA) and flexible spending account (FSA) funds for over-the-counter medical products, including those needed for quarantine or social distancing, without a prescription from a physician.
• Confidentiality and Disclosure of Records Covered by 42 CFR Part 2: Allows for additional care coordination by aligning 42 CFR Part 2 regulations, which govern the confidentiality of substance use disorder treatment records, with existing Health Insurance Portability and Accountability Act (HIPAA) privacy requirements, with initial patient consent.
• Temporary Moratorium of Medicare Sequestration: Temporarily lifts the 2% Medicare sequester from May 1 through December 31, 2020.

The bill can be read in full here.