Group Health Plans Must Affirm Compliance with Price Transparency Rule

Employers that sponsor group health plans need to ensure they are in line with a new annual requirement to vouch that they are complying with a federal price transparency rule.

The reporting requirement was part of the No Surprises Act, which passed in 2021 as part of the Consolidated Appropriations Act. It prohibits group health plans from entering into any agreement that prevents them from providing information on cost or quality of care to enrollees in the plan or referring providers. A health care provider, network or other service provider may place reasonable restrictions on the public disclosure of this information.

Group health plans must annually submit an attestation of compliance to several federal agencies via the U.S. Centers for Medicare & Medicaid Services. The first attestation was due on Dec. 31, 2023. Subsequent attestations are due by Dec. 31 of each year thereafter. The agencies recently provided detailed instructions for submitting the attestation.

If a group health plan missed the 2023 deadline, “do it ASAP. Even if it’s late, send it in,” said Anne Tyler Hall, an attorney with Hall Benefits Law in Atlanta.

Self-funded and partially self-funded health plans may satisfy the requirement by signing a written agreement under which the plan’s service provider, such as a third-party administrator, attests on its behalf. However, the health plan remains legally responsible if the third-party administrator fails to submit an attestation.

“The ultimate onus is on the plan sponsor,” Hall said.

The following entities are not required to submit an attestation:

• Hospital indemnity or other fixed indemnity insurance plans.
• Disease-specific insurance plans.
• Dental, vision and long-term care plans.
• Accident-only, disability and workers’ compensation plans.
• Medicare and Medicaid plans.
• State-run children’s health insurance plans.

Penalty for Violations

The penalties for noncompliance could add up. “Failure to file gag clause attestation could result in enforcement action, which may be a $100 per day excise tax under the Internal Revenue Code or civil penalty under ERISA [Employee Retirement Income Security Act],” said Sage Fattahian, an attorney with Morgan Lewis in Chicago.

Violating the attestation requirement also could invite an IRS or U.S. Department of Labor audit, Hall said. “They find plans that have one issue and their hypothesis is that, if they are not in compliance with this gag clause attestation requirement, they’re probably not in compliance” with other laws, she noted.

Congress intended for the law to make provider-specific cost and quality information accessible to patients and health plans.

Patients often don’t know what a doctor will charge for services or procedures, such as an MRI or anesthesia. Comparing costs for different providers is often difficult.

“Increased transparency is an important driving force behind this and other regulatory requirements enacted under the Consolidated Appropriations Act” of 2021, Fattahian said.

Regarding medical claims data, “in the past, service providers have said, ‘No, this is our proprietary information,’ ” Hall explained. “Congress wants to try to make sure that plans understand what they are paying and participants understand what they are paying.”