Consolidated Appropriations Act – Impact on Healthcare

The Consolidated Appropriations Act of 2021 (CAA), signed into law on December 27, 2020, has far reaching impact, particularly in the area of healthcare financing and delivery.  On it’s surface, the CAA was another coronavirus relief effort, including $900 billion of available funding.  But it’s impact and focus on healthcare is profound and will impact virtually every American citizen.

Much like the Affordable Care Act (ACA), the CAA has several “time released” aspects, with different requirements/provisions taking effect at different dates.  For purposes of this blog, and the audience it serves, we’ll focus on the three (3) primary areas that the CAA affects:

1. Healthcare Transparency (removal of gag clauses, price comparison tools, broker/consultant disclosure, reporting on pharmacy benefits and costs)
2. No Surprise Billing
3. Mental Health Parity

Healthcare Transparency – the healthcare industry has long been plagued by its inability to provide full transparency of pricing and quality related to procedures, therapies, drugs, and devices.  There are a number of reasons why this has been the case, but the CAA seeks to remove the historical barriers to accessing accurate pricing.

• • – Effective with the CAA’s passage date (12/27/2020), contracts between healthcare providers and payers can no longer prevent the full disclosure of pricing and quality of care data.  In addition, plan sponsors/employers will be able to access de-identified claims data in the interest of plan administration and quality improvement.
  • – Beginning on July 1, 2022 (originally 1/1/2022), health plans must make available, machine readable files (MRF) posted/available on a public website that does not require account setup.  These files must be updated monthly and include negotiated rates associated with in-network providers, allowed amounts for out of network providers, and eventually, prescription drugs.  By 1/1/2023, these new price comparison tools must include data on 500 shoppable items/services, and by 1/1/2024, pricing data must be available for all covered items/services. (Note: Employer groups that have “fully insured” plans are not required to post the MRF/healthcare pricing data link on their own websites.  The various insurance companies that serve this market will be posting the link on their websites.  Employers groups having self-insured health plans are required to post the link on their “public facing websites”.)
  • – Effective for employer group health plan contracts initiated/extended/renewed on or after 12/27/2021, brokers and consultants are required to provide full disclosure of direct and indirect compensation.  Importantly, this provision, affecting “covered service providers” (CSP), applies only when direct/indirect compensation equals or exceeds $1,000 payable to brokers/consultants.
  • – Delayed until 12/27, 2022, group health plans will be required to report to various federal government agencies information pertaining to medical costs and prescription drug spending.  Reporting of this data will be required by June 1 of every year moving forward.

No Surprise Billing – Also referred to as the “No Surprises Act” (NSA), this portion of the CAA, effective for plans renewing on or after 1/1/2022, applies to so called surprise bills that arise from out of network providers.  One of the more prominent providers/services affected by NSA is air ambulance.  It is not uncommon for a patient to initially seek/receive care from an in-network provider, only to have a separate service(s) rendered by an out of network provider.  Moving forward, providers will no longer be allowed to balance bill patients for amounts that are arbitrarily arrived at.  The CAA has developed methods for healthcare providers and payers to work together to arrive at a fair and reasonable billable charge for out of network services.  In addition, the NSA portion of the CAA does the following:

• • • – Creates an independent dispute resolution (IDR) process for providers and payers to resolve disagreements of out of network charge amounts
    • – ID cards (digital and paper) that include relevant health plan cost sharing items like copays, deductibles, and coinsurance, along with customer support information.
    • – Healthcare providers must put forth a good faith estimate of charges and related items, to consumers, upon request.
    • – Health plans must provide an advanced explanation of benefits (EOB) after receiving a request for a good faith estimate of charges.
    • – Health plans must make provider directories available on an accessible public website, and update them every 90 days or sooner.
    • – Continuity of coverage when a provider’s status changes from in to out of network.

Mental Health Parity – Building off of existing mental health parity (MHP) laws, the CAA requires health plans to conduct comparative analyses of nonquantitative treatment limitations used for non-mental health medical and surgical services, against mental health and substance abuse related benefits.  Federal agencies must be able to access this data from health plans effective 2/10/2021, and if found out of compliance, health plans will have 45 days to take corrective action.  If compliance is not achieved within this time frame, health plans have to notify affected plan participants within 7 days.

There are additional provisions embedded in the CAA that address –

• • – Health insurance tax credits
  • – Employee retention credits
  • – Student loan repayments
  • – Business meal deductions (100% for 2021 and 2022)
  • – HSA qualified high deductible plans may continue to offer tele-health benefits paid at 100%, prior to the deductible being met (through 2022)
  • – Retirement plan rule changes

Employers are encouraged to work with brokers, HR managers, plan administrators, etc., to assure proper compliance with the various provisions of the CAA.

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