Consolidated Appropriations Act 2021 Gag Clause Guidance Released

The Departments of Labor, Health and Human Services, and the Treasury, with the Office of Personnel Management (the “Departments”) have jointly released FAQs About Consolidated Appropriations Act, 2021 Implementation Part 69 (“FAQs Part 69”). This guidance addresses gag clause compliance and emergency services payment issues.

As a reminder, the no gag clause rule prevents plans and issuers from making agreements with health care providers, networks or associations of providers, third-party administrators (TPAs), or other service providers if such agreements would restrict the plan or issuer from providing, accessing, or sharing specific information related to the cost or quality of care, de-identified claims, or encounter data. It also prohibits restrictions on sharing this information with business associates, as long as applicable privacy regulations are followed. These rules became effective on December 27, 2020, and the gag clause attestation is due annually by December 31.

The newly released guidance offers insight into implications on downstream agreements. A downstream agreement exists when a plan or issuer contracts with a service provider who in turn contracts with another party to perform certain services. This guidance states that downstream agreements are likewise subject to the gag clause restrictions. To ensure compliance with the rule, the Departments expect contracts with TPAs or other service providers to include language that prohibits the TPA or other service providers from entering into downstream agreements restricting the plan or issuer from sharing information or data.

Sponsors of self-funded plans will want to consider including a provision in services agreements restricting the vendor from entering any agreements with subcontractors that include prohibited gag clauses. If a gag clause exists in a downstream agreement this would need to be disclosed on the attestation. This information can be reported on the attestation in the box marked “Additional Information” in step 3. The additional information entered should include, but is not limited to, any gag clause the service provider refused to remove, name of the TPA or service provider, details on the plan’s request to remove any such gag clauses, actions taken by the service provider indicating the agreement contains a gag clause and any other steps taken by the plan to comply. A plan sponsor should retain records showing its attempts to ensure no prohibited clauses.

In addition, the newly released FAQs offer guidance related to the No Surprises Act (NSA) and the calculation of the Qualifying Payment Amount (QPA) for cost sharing, disclosures with the initial payment or notice of denial, and submission required under the IDR process.

As a reminder, the NSA was passed in an effort to protect consumers from surprise billing. It provides that individuals can only be charged the in-network rate for the following:

• Emergency services provided by an out of network provider or at an out of network facility
• Services provided by an out of network provider at an in-network facility
• Air ambulance services. The Rules do not apply to ground ambulance services. Note it does not apply to air ambulance transport used in non-emergent situations.

Any balance must be resolved between the provider and the payer. The law provides that this resolution is accomplished through a type of baseball style arbitration. There has been significant litigation over the past few years over how to arrive at a payment amount. These FAQs provide guidance to providers and payers about calculating the QPA while the IDR process remains in a state of flux. The guidance suggests that plans and issuers will need to use a good faith, reasonable interpretation of the statutes and regulations that remain in effect when calculating the QPA.

The NSA applies to self-funded health plans, individual and group health plans, public and private sector health plans, and grandfathered health plans. If the health plan is insured the insurer handles this negotiation. Sponsors of self-funded health plans will want to be sure the services agreement clearly describes who is responsible for these negotiations. This negotiation process will evolve as the litigation continues to play out. It does not apply to excepted benefit plans such as standalone vision or dental plans, health reimbursement arrangements, retiree-only plans, and short-term limited duration policies.

The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.