On December 27, 2020, President Trump signed Consolidated Appropriations Act, 2021 (“Act”). The voluminous appropriations and COVID-19 relief package also includes the most significant health care legislation since the Affordable Care Act, addressing balancing billing and cost transparency, as well as extending the COVID-related FSA relief measures implemented earlier this year. Following is a high-level summary of the health care provisions of the Act and what they mean for patients, providers, and health plans.

Unless otherwise noted, the following provisions are effective for plan years beginning on or after January 1, 2022.

Surprise Billing Package

Patient Protections

• Out-of-Network Care. Patients may not be billed more than the network cost-sharing amount for services received from a participating facility or non-participating emergency room unless the patient receives notice of a provider’s non-network status in advance and consents to the non-network treatment and cost.
• Pre-Authorization Not Required. Plans may not require preauthorization for emergency services.
• Patient Deductible. Out-of-network surprise bills will be applied to the patient’s network deductible.
• Continuity of Care. If a provider changes network status (i.e., leaves the plan’s network), patients with certain needs may continue care with the provider for up to 90 days at network cost sharing rates to allow for a transition of care to a network provider (see “Health Plan Requirements).”
• Inaccurate Network Directories. If a patient provides documentation that he or she was provided inaccurate information from a plan or insurer about a provider’s network status prior to treatment, the patient will only be responsible for the in-network cost-sharing amount.
• Grandfathered Plans Included. Surprise billing protections apply to grandfathered plans.

Health Plan Requirements

• Expansion of External Review. Plans must accommodate requests for external review following an adverse benefit determination when the applicability of surprise billing protections are in question.
• Price Comparison Tool. Effective January 1, 2023, health plans must offer a price comparison tool that is available online or via telephone. The tool must permit participants to compare cost-sharing among participating providers for particular services and items in a specific geographic location.
• Identification Cards. Health plan identification cards (both physical and electronic) must include the participant’s in- and out-of-network deductible and out-of-pocket maximum amounts, as well as a telephone number or website address where the participant can obtain additional plan-related information.
• Advanced EOBs. Plans that receive pre-service notifications from providers must provide notice to participants that include:
  • Whether the provider or facility is a participating provider;
  • The good faith estimate included in the notification from the provider;
  • A good faith estimate of the amount the plan will pay for the services;
  • A good faith estimate of the participant’s cost share;
  • A good faith estimate of the amount that the participant has incurred toward deductibles and out-of-pocket maximums;
  • For services that are subject to medical management, a disclaimer that such medical management is a prerequisite for coverage;
  • A disclaimer that the information provided is only an estimate and is subject to change; and
  • Any other information deemed appropriate by the plan.

Enforcement of this provision has been deferred pending further rulemaking.

• Timeline for Claims Adjudication. Health plans must make an initial payment or denial of claims to the billing provider or facility within 30 days of receipt of the claim.
• Provider Directories. Health Plans must maintain up-to-date directories of network providers, which must be available online or within one business day of inquiry. By 2022, plans must verify and update directories at least every 90 days. Directories must be available online and accessible to the public.
• Inability to Comply with Deadlines. HHS will develop regulations detailing extenuating circumstances or types of billing that may prevent plans or providers from complying with timelines.
• Continuity of Care. If a provider leaves the network, plans must provide 90 days of in-network care for participants in cases involving:
  • Pregnancy;
  • Treatment for serious and complex conditions;
  • Inpatient confinement;
  • Scheduled non-elective surgery; or
  • Terminal illness.
• Disclosure of Balance Billing Rules. Provide disclosures on the plan’s public website and on each EOB regarding the requirements relating to prohibitions on balance billing.

Provider Requirements

• Balance Billing Prohibited in Certain Situations. Facilities or providers may not balance bill for more than the network cost sharing amount:
  • for emergency services received in a non-participating facility;
  • for certain ancillary services performed in a participating facility by out-of-network radiologists, pathologists, emergency medicine providers, anesthesiologists, providers of diagnostic and neonatal services, assistant surgeons, hospitalists, and intensivists;
  • for services provided by a non-participating provider in a participating facility when there is no participating provider who can furnish such services;
  • for services provided by a non-participating provider or facility without the patient’s informed consent. For consent to be valid, the patient must (i) be given notice of network status and an estimate of charges 72 hours in advance of services, and (ii) consent in writing to the out-of-network care. For appointments with less than 72 hours’ notice, notice must be given the day the appointment is made.
• Good Faith Estimate. At least three days in advance of providing service (and not later than one day after service is scheduled), providers and facilities must verify the type of coverage in which the patient is enrolled and provide a good faith estimate, regardless of whether the patient is covered.

Medical Bill Resolution

• Provider/Plan Claims Resolution.
  • Providers and health plans have a 30-day resolution period to settle out-of-network claims, beginning on the day the provider receives the plan’s initial payment or notice of denial.
  • If no agreement is reached, parties may (within four days, beginning the day after the 30-day resolution period ends) initiate Independent Dispute Resolution (IDR). The IDR entity will consider the median in-network rate, along with other factors (provider’s training and experience, patient acuity, complexity of service, facility status, prior contracted rates, etc.). IDR determinations will be made within 30 days, and are binding.
  • Multiple claims for similar services involving the same parties may be bundled in one proceeding.
  • Following IDR, the initiating party may not take the same party to IDR for the same service for 90 days.
• Provider/Patient Dispute Resolution. HHS will establish a patient-provider dispute resolution process for uninsured individuals no later than January 1, 2022.

Air Ambulance

• Balance Billing Prohibited. Air ambulances may not bill patients for more than the network cost-sharing amount.
• Resolution of Disputed Claims. A 30-day open negotiation period is available for air ambulance providers and plans to settle claims. Unsettled claims will go to IDR.
• Plans must submit two years of claims data related to air ambulance services to the Secretary of HHS, which will be used to publish a report on cost and claims data submitted.

Transparency Provisions

Health Plan Requirements  

• Gag Clauses Prohibited. Beginning December 27, 2020, plans may not enter into contracts that:
  • bar the disclosure of information relating to provider cost and quality, or
  • prevents plans from accessing de-identified claims information.

Plan Administrators must submit an annual attestation that the plan is in compliance with the gag clause requirements.

• MHPAE Act Compliance. Plans must be able to provide, upon request, a detailed analysis documenting compliance with the Mental Health Parity and Addiction Act’s non-quantitative treatment limitation.
• Beginning December 27, 2022 and not later than June 1 of each year thereafter, plans must annually report detailed plan information, including:
  • The 50 most commonly prescribed brand drugs for which claims were paid, and the total number of paid claims for each 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 drug;
  • The 50 prescription drugs with the greatest increase in plan expenditures over the plan year preceding the previous plan year and, for each such drug, the change in amounts expended by the plan in each plan year.
  • Total spending on health care services by the plan, broken down by (i) Types of costs (e.g., hospital costs, provider costs, prescription drugs, etc.); and (ii) spending on prescription drugs by health plan and enrollees.
  • Average monthly premium paid by a) employers on behalf of enrollees, and b) enrollees.
  • Impact on premiums by rebates, fees, and other remuneration paid by drug manufacturers to the plan or its administrators or service providers; and
  • Any reduction in premiums and out-of-pocket costs associated with rebates, fees, or other remuneration.

Broker Requirements

• Broker Disclosures. Beginning December 27, 2021, entities that provide brokerage or consulting services to group health plans with the expectation of receiving at least $1,000 in direct or indirect compensation must provide the plan fiduciary with (i) a description of the services to be provided and (ii) the type of compensation expected. The disclosure must be made before a service contract is executed or renewed.

FSA Provisions

The Act permits, but does not require, the following changes to cafeteria plan flexible spending arrangements (“FSAs”). Retroactive amendments are permitted, provided (i) the amendment is adopted on or before December 31 of the year following the amendment’s effective date, and (ii) the plan is administered consistent with the terms of the amendment during the period between the amendment’s effective date and adoption date.

The following legislation is effective December 27, 2020.

• FSA Rollovers. Health and dependent care FSA participants may carry over unused balances from a plan year ending in 2020 to a plan year ending in 2021, and from a plan year ending in 2021 to plan year ending in 2022. The Act does not include a maximum carryover amount.
• FSA Grace Period Extensions. Plans may allow a health and dependent care FSA grace period for a plan year ending in 2020 or 2021 to be extended 12 months after the end of such plan year.
• Health FSA Reimbursements. An employee who ceases participation in the plan (e.g., terminates employment) during 2020 or 2021 may continue to receive reimbursements from unused balances through the end of the plan year in which such participation ceased (including any grace period).
• Dependent Care FSA. Dependent care FSA participants whose qualifying child turned age 13 during the pandemic may continue to receive reimbursements for dependent care expenses for the remainder of the plan year, provided the participant’s regular enrollment period was on or before January 31, 2020. If a balance remains in the participant’s dependent care FSA at the end of the plan year, the participant may receive reimbursements during the following plan year until the child turns age 14.
• FSA Election Changes. Participants may make health and dependent care FSA election changes for plan years ending in 2021, regardless of whether the participant experiences a qualifying event.

As always, Pinnacle remains committed to serving you and helping you navigate through these provisions as seamlessly as possible. We realize these are significant legislative changes and expect there to be corresponding cost increases for employers. These cost adjustments will allow us to continue providing a high level of service you have come to expect from Pinnacle. We will communicate these adjustments as they become available.