Understanding the Transparency In Coverage Provisions in the No Surprises Act

The No Surprises Act, passed in 2020, is now effective as of January 1, 2022. However, healthcare providers and other industry groups successfully lobbied to delay certain provisions, including the transparency in coverage requirements, until July 1, 2022, to successfully implement these provisions.

What is the transparency in coverage provisions of the No Surprises Act and how will they affect consumers, payers, and providers? Alaffia Health has the answers you need.

Transparency In Coverage

The transparency in coverage rule was issued with input from the Department of the Treasury, Department of Labor, and Department of Health and Human Services. It has the following objectives:

  • Give individuals information to make informed decisions about their healthcare
  • Address wide price variations between providers
  • Empower employer-funded and other health plans to seek better negotiated rates
  • Provide individuals with needed information to negotiate with providers for lower rates
  • Encourage third party innovation to make healthcare complexities more comprehensible for consumers
  • Give regulators insight into the evaluation of collusive or unfair practices

The rule issues several requirements to health insurers and group health plans:

Publicly available files (machine-readable): Insurers and plans will be required to post publicly available, machine-readable files including in-network negotiated payment rates and past out-of-network charges for covered items, services, and prescription drugs. These files must be updated monthly and include the following information:

  • Negotiated rates for in-network providers
  • Historically allowed amounts and billed charges for out-of-network providers
  • Negotiated rates and historic net prices for prescription drugs (note: this provision is delayed pending further rulemaking)

Consumer Price Transparency Tool: Insurers and plans must create online member-facing price comparison tools that include individualized information regarding their members’ share of costs for covered items and services, including prescription drugs. These tools must:

  • Allow search based on billing codes and descriptions
  • Allow cost comparisons across both in-network and out-of-network providers
  • Track members’ deductibles and out-of-pocket expenditures
  • Provide transparency on factors impacting costs, such as location or dosage
  • Provide cost estimates in paper format if requested

500 services, items, and drugs are included in the first phase, for plan years on or after 1/1/23; all other covered items and services must be included for plan years on or after 1/1/24.

Exceptions From The Rule

The following plans are excluded from mandatory compliance with the transparency in coverage rule:

  • Grandfathered plans (plans that were in effect before the passage of the Affordable Care Act in 2010 with no major changes)
  • Targeted benefits plans (i.e. dental, vision, or hearing plans)
  • Retiree only plans
  • Medicare/Medicaid
  • Flexible Spending Accounts (FSA), Health Savings Accounts (HSA), etc.

Healthcare Payers: Getting Ready for Transparency in Coverage

While regulators delayed the implementation of the transparency in coverage rules to July of 2022,  further delays are unlikely. For insurers and healthcare payers affected by the rule, it’s time to start preparing.

Gather, Process, and Format Your Data

You likely have the data you need to comply with the rule, but it takes time to ensure it’s in a machine-readable format and available to the public. You’ll want to develop the tool you need and ensure you’ve extracted the data and made it available in the proper format. You’ll need to include both your negotiated rate information and your allowed amount information.

These files must be kept up to date each month, so make sure you implement a process to update and release new information.

Plan For Compliance

It’s also a smart idea to develop a comprehensive compliance plan. A good faith effort to comply, evidenced by a compliance plan, may be enough to avoid sanctions or fines if you run into challenges like internet outages or human error. Include policies and procedures on how you’ll capture information, how you’ll provide it to customers, and how you’ll address technical difficulties or unexpected events.

Leverage Competitive Data

One ancillary benefit for healthcare payers is the wealth of information you’ll have on your competitors. Yes, you’re required to release your data publicly, but so is everyone else, and smart organizations will use that data for their own benefit.

The data you can harvest from competitors will help you analyze your products’ competitiveness and price them appropriately. You can also use this data to negotiate with providers, driving your costs down. And, of course, seeing how competitors present their data may lead to improvements in your own website, helping you capture consumers that compare the transparency and ease of use of your organization compared to competitors.

Payment Integrity: Preserving Your Margins

One thing the No Surprises Act doesn’t address is the estimated 80% of medical claims with at least one fraud, waste, abuse, or erroneous charge. With the advent of transparency in coverage guidelines, payment integrity efforts will be more important than ever. Fortunately, Alaffia Health is the solution you need.

Our AI-driven platform allows our expert analysts to review more claims, and to focus their reviews on the claims most likely to contain expensive errors. We prevent and recover more overpayments, helping keep your costs and your margins under control. Find out how Alaffia Health integrates with your existing systems to provide a true turnkey payment integrity solution. It only takes a few minutes to begin generating immediate savings. Learn more now!