Coverage Provisions In The 2021 Appropriations And COVID-19 Stimulus Package

On December 27, 2020, President Trump signed into law a sweeping legislative package that appropriated more than $1.4 trillion for fiscal year 2021 and included $900 billion for pandemic relief. The legislation cleared the U.S. House of Representatives and Senate on a bipartisan basis in the week prior, but President Trump delayed signing the legislation, citing the need for additional pandemic relief for individuals and families. He ultimately signed the bill, averting a looming government shutdown, as debate continued in Congress over whether to provide additional stimulus checks.

The 2,124-page legislation is wide-ranging and funds or otherwise addresses many important health-related policies and programs. For instance, the bill restores Medicaid access for citizens of the Freely Associated States, funds programs to fight food insecurity, directs modernization of our public health data system, and extends funding for critical health programs such as community health centers. The package also includes emergency pandemic relief with funding for vaccine distribution, COVID-19 testing, and other public health activities; funding for schools; temporary changes to the Medicare physician fee schedule; unemployment assistance; changes to the Paycheck Protection Program; emergency rental assistance; funding for the postal service; and a new round of “recovery rebates.”

This post focuses on the bill’s coverage-related provisions. These include appropriations provisions relevant to the Affordable Care Act (ACA), protections from surprise medical bills, continuity of care protections, enhanced mental health parity requirements, and several new provisions designed to increase the transparency of health care costs. (Unlike last December’s budget bill, there are no provisions related to more controversial ACA issues, such as silver loading or auto-reenrollment.)

Summaries of the legislation are available from the House and Senate. A summary of appropriations, including for the Department of Health and Human Services (HHS), is available here and in even more detail here. There are separate summaries for the pandemic relief provisions and policy changes that are unrelated to appropriations.

ACA-Specific Appropriations Provisions

Consistent with prior budget bills, the legislation includes a series of provisions aimed at ACA spending and reporting. First, the bill prohibits HHS from using certain program management funds to make risk corridor payments to insurers, essentially limiting funds to those collected by insurers. The language is the same as prior years but has no practical impact following a Supreme Court decision that insurers are entitled to unpaid risk corridors payments from the Judgment Fund.

Second, Congress expressly bars the use of appropriated funds, including funds transferred from the ACA’s Prevention and Public Health Fund, for purposes of lobbying for or against federal, state, or local legislation, regulations, or executive action. Prior appropriations bills had included this language, but it has not been included in recent budget bills. The legislation also authorizes the Secretary to transfer funds to support program management activity under the Medicare program while expressly prohibiting those funds from being used to support any provision of the ACA.

Third, the Secretary must publish information about the costs associated with implementing, administering, enforcing, or otherwise carrying out the ACA. This information is focused on the cost of employing federal workers or contractors who work on the ACA. The report must include the section of the ACA under which funds were appropriated, a statement indicating which program or project received the funds, the operating division or office that administers the funding, and the amount of funding.

Fourth, the Secretary must publish, as part of the fiscal year 2022 budget, detailed information regarding funds used for the marketplaces for each year since enactment of the ACA and proposed uses for those funds for fiscal year 2022. This information must be included under a special section titled “Health Insurance Exchange Transparency.”

Fifth, the bill transfers some of the remaining funds in the ACA’s Prevention and Public Health Fund. For instance, of the $7.9 billion made available for the Centers for Disease Control and Prevention, $856 million is transferred from the Prevention and Public Health Fund. Otherwise, the legislation limits the transfer of funds from the Prevention and Public Health Fund. The bill also reinforces that Section 2713 of the Public Health Service Act’s requirement to cover breast cancer-related preventive services should be administered using the U.S. Preventive Services Task Force’s recommendations from before 2009.

Protections From Surprise Medical Bills

The No Surprises Act, adopted as part of the broader legislative package, includes comprehensive new protections against surprise medical bills. Patients will be protected from surprise medical bills sent from an out-of-network provider for emergency services (including by air ambulances, although not ground ambulances) and non-emergency services at in-network facilities (unless a patient consents to treatment by an out-of-network provider). Patients treated by an out-of-network provider will only be liable for cost-sharing amounts that apply to in-network services, and providers cannot send bills for any higher amounts. The legislation establishes an arbitration process to resolve payment disputes between insurers and out-of-network providers, with several guardrails to prevent abuse of the arbitration process.

The No Surprises Act was summarized in detail in a prior Health Affairs Blog post (which has been updated to reflect the changes adopted in the final legislation). Parts of the No Surprises Act build on parts of the ACA, including the law’s patient protections for emergency services and external review. The law also borrows from the enforcement and state preemption frameworks first adopted under HIPAA and then extended by the ACA.

The new surprise medical bill protections apply to group health plans, as well as health insurers offering group or individual health insurance coverage. This includes coverage offered in the individual, small group, and large group markets and extends to self-funded plans, grandfathered plans, and insurers that offer coverage through the Federal Employees Health Benefits Program. Note that the protections extend only to individual health insurance coverage, meaning products that are exempted from this definition—such as short-term limited duration insurance—do not have to comply with the No Surprises Act. The law is also clear that the protections do not apply to excepted benefits.

From here, the tri-agencies—HHS alongside the Departments of Labor and the Treasury—will issue new rules to implement many of the provisions of the No Surprises Act. The tri-agencies will have much work ahead of them to adopt rules before these protections go into effect for plan years that begin on or after January 1, 2022.

Congress also directs the tri-agencies to implement a provider nondiscrimination provision included in the ACA. The legislation includes quite specific instructions to issue a proposed rule with a 60-day comment period and finalize the rule within six months after the end of the comment period.

Continuity Of Care Provisions

Included in the No Surprises Act is a provision to govern patient care when there is a change in the contractual relationship between a health care provider and an insurer or group health plan (i.e., when a patient’s in-network provider suddenly becomes an out-of-network provider during a plan year). This could happen because the insurer or provider terminates or declines to renew their contract. In this case, some patients will be able to temporarily maintain access to their provider or facility as if they were still covered on an in-network basis.

Only certain “continuing care” patients will qualify for these continuity of care protections. A patient must be undergoing a course of treatment for a serious and complex condition or for institutional or inpatient care—or be scheduled for non-elective surgery, pregnant, or terminally ill. In each instance, the patient must already be receiving care or treatment from the provider or facility.

If there is a change in a provider’s network status, the insurer or group health plan must notify the continuing care patient and inform them of their right to receive transitional care from that provider or facility. The insurer or plan must also provide an opportunity to request that transitional care and allow for continued benefits (under the same terms and conditions as would have applied for an in-network provider). The patient will be able to access these services for up to 90 days after the notice is provided or until the patient no longer qualifies as a continuing care patient, whichever is earlier. Providers cannot not send a balance bill to those patients; instead, providers must accept in-network payments from the insurer or group health plan (and cost-sharing amounts from the patient) as payment in full.

Promoting Compliance With Mental Health Parity Requirements

Continuing to build on the ACA and prior federal laws, the legislation further enhances federal mental health parity protections, with an emphasis on compliance regarding non-quantitative treatment limits (NQTLs) on mental health or substance use disorder benefits.

Insurers and group health plans will have to perform and document comparative analyses of the design and application of NQTLs on mental health or substance use disorder benefits. This information must be made available to state and federal regulators, on request, within 45 days of enactment, along with a description of relevant benefits in each category, factors used to determine that the NQTLs apply to mental health or substance use disorder benefits versus medical or surgical benefits, evidentiary standards for those factors, and specific findings and conclusions regarding the results of the comparative analyses.

Federal officials must request this information—at least 20 comparative analyses per year—from entities that have potentially violated federal mental health parity laws. Federal officials can require a corrective action plan or additional analysis to demonstrate compliance. Federal officials must issue a public report summarizing the analyses reviewed, conclusions about whether the data submitted was sufficient (or not), and actions taken by insurers and plans to come into compliance with federal requirements.

Federal officials must also issue a compliance program guidance document with illustrative examples, and update that document every two years, to help promote compliance. Additional guidance must be developed on a range of other topics, including disclosures.

These requirements extend to CHIP and Medicaid managed care organizations, but those entities will be treated as compliant if they satisfy existing federal regulations on mental health parity or successor regulations.

Transparency Provisions

The legislation includes several provisions (within the No Surprises Act and beyond) to improve the transparency of underlying health care costs and consumer out-of-pocket costs. Some of these changes will directly benefit consumers through improved information while others will enhance the collection of data for use by researchers, the media, and federal and state policymakers.

Transparency For Consumers

For plan years that begin on or after January 1, 2022, insurers and group health plans will have to comply with a range of new transparency-related requirements.

Insurers and group health plans will have to offer a price comparison tool (online and by phone) so enrollees can compare cost-sharing amounts for a certain item or service by any provider. Insurers and group health plans must also better disclose cost-sharing requirements by listing plan-specific deductibles and out-of-pocket maximums on insurance cards alongside a phone number and website where an individual can ask about network status.

Separately, consumers will be entitled to receive an “advanced” explanation of benefits (EOB). This requirement will be triggered when a provider notifies the insurer or group health plan that an enrollee is scheduled to receive a health care service. The advanced EOB must explain whether the provider is in-network (or not); include good faith estimates of costs, cost-sharing, and progress towards meeting the patient’s out-of-pocket maximum and deductible; and make certain disclaimers.

Insurers and group health plans must also improve the accuracy of provider network directories through a new verification process, a response protocol, and establishment of a new database. Under the verification process, insurers and group health plans must verify and update provider directory information at least every 90 days and remove any providers where information can no longer be verified. Insurers and group health plans must also respond to enrollees about a provider’s network status within one business day of a request and establish a database of in-network providers.

By the same token, providers must submit timely updates regarding their provider directory information to insurers and group health plans. Providers must do so at the beginning or end of an agreement with a payer, when there are material changes to the content of the provider directory information, and in other instances established by federal officials. Providers may, however, require—in their contracts with insurers and group health plans—that provider directory information must be removed when the contract is terminated.

Beyond requiring accurate directories, the legislation provides cost-sharing relief to enrollees who relied on inaccurate information in an insurer or group health plan’s database, provider directory, or response protocol. In these instances, the insurer or group health plan cannot impose cost-sharing that is higher than in-network cost-sharing. Any cost-sharing must also be applied towards the enrollee’s deductible and out-of-pocket maximum as if the services were provided by an in-network provider. If a provider charges higher cost-sharing to a patient (based on out-of-network cost-sharing instead of in-network cost-sharing) and the patient pays the bill, the provider must reimburse the enrollee for the excess amount plus interest.

All-Payer Claims Databases

The legislation includes grant funding of $125 million for states to establish all-payer claims databases (APCDs). APCDs can collect data on health care claims—medical, pharmacy, or dental—from a variety of public and private payers. This data can provide policymakers and researchers with much-needed information to understand health care costs, utilization, and quality. To date, 21 states have established or are implementing APCDs, and an additional 11 states have indicated a “strong interest” in doing so. This interest will surely be bolstered by the new grant program, which authorizes three-year grants of $2.5 million for states that apply and meet the requirements.

To further enhance data collection, the Secretary of HHS may prioritize multi-state applications for APCDs or applications where the state will adopt a new reporting format for self-funded group health plans. Under a Supreme Court decision from 2015, states cannot require third-party administrators or self-funded group health plans to contribute data to an APCD. This remains true under the legislation, which does not disturb that precedent. But the legislation separately requires the development of a standardized reporting format for group health plans to enable voluntary reporting to state APCDs. The Secretary of Labor must also provide guidance to states on the process that could be used to collect this voluntary data in the standardized format.

Removing Gag Clauses

The legislation prohibits insurers and group health plans from entering into agreements with providers (including an association or network of providers) or third-party administrators that include a “gag clause.” Gag clauses restrict or prevent insurers from making price or quality information available to patients or other third parties. Congress previously barred gag clauses in contracts between pharmacies and insurers or pharmacy benefit managers; those gag clauses had prevented pharmacists from disclosing cost information to patients.

Here, insurers and group health plans cannot enter into agreements with providers that would restrict their ability to disclose provider-specific cost or quality information or data—whether to patients, employers, referring providers, or business associates. Group health plans and insurers offering group coverage also cannot contract away their right to electronically access de-identified claims and encounter information or data for enrollees. Providers can place “reasonable restrictions” on public disclosure of this information, but insurers and group health plans must retain access to this information. Compliance with the ban on gag clauses will be enforced through annual attestations submitted by insurers and group health plans.

Disclosure Of Broker Compensation

Insurers that offer individual health insurance coverage or short-term limited duration insurance must disclose the direct or indirect compensation they provide to agents or brokers to incentivize enrollment in their products. This information must be disclosed to enrollees before plan selection and on any documentation confirming enrollment. This information must also be reported to the Secretary of HHS, who must issue rules regarding the disclosures and reports.

The legislation includes a similar (and more extensive) disclosure requirement—regarding direct and indirect compensation for brokers and consultants—for group health plans. These requirements go into effect one year from enactment, in December 2021.

More Data Collection

Under the No Surprises Act, air ambulances providers and insurers must submit a significant amount of data to the federal government. The Secretary of HHS must, in consultation with the Federal Trade Commission and Attorney General, conduct a study on the effects of the No Surprises Act on provider consolidation, health care costs, and access to care. And the Government Accountability Office must issue multiple reports on the overall impact of the No Surprises Act as well as its effects on network adequacy and data related to the arbitration process.

Beyond surprise medical bills, insurers and group health plans must submit data on pharmacy benefits and drug costs to federal regulators on an annual basis. This data includes, for instance, each plan’s 50 most costly drugs, the 50 drugs with the greatest increase in plan expenditures over the prior year, total spending on health care services (broken down into some detail), average monthly premiums, and any impact on premiums from rebates, fees, or other remuneration paid by drug manufacturers. This information will be compiled in a publicly available biannual report by each of the tri-agencies on prescription drug reimbursement, pricing trends, and the role of prescription drug costs in contributing to premium increases or decreases.