Self-Insured Group Health Plan Litigation
We also represent plan participants in self-insured group health plan litigation under ERISA. Currently, our focus is on a new ERISA regulation that requires a group health plan to make two types of disclosures with respect to insurance coverage available under a group plan: (1) public disclosures and (2) participant disclosures.
Closely related to these two disclosure requirements is the 2020 bill passed by Congress called the “No Surprises Act” that regulates billing by out-of-network providers. This No Surprises Act specifically targets out-of-network providers who have often submitted a “surprise” bill to patients–most often in emergency room situations.
REQUIRED PUBLIC DISCLOSURES
,All group health plans governed under ERISA must now make specific public disclosures, on a publicly-available website (without login requirements) in three separate categories:
(1) In-Network rates for all covered items and services (not including pharmaceutical drugs) that a Plan will pay to a provider at an agreed upon contract rate;
(2) Out-of-Network billed charges, and allowed amounts of those billed charges, with respect to covered items and services furnished by out-of-network providers during the specified period; and
(3) Prescription Drug billing information that includes negotiated rates with each in-network pharmacy or other prescription drug dispenser, and historical net prices for pharmaceutical drugs over the specified period.
These public disclosure requirements should be a game changer for group health plan participants to bring down the overall cost of insurance to company employees.
Industry information shows that insurance companies may negotiate a very significant price decrease from the bill submitted–up to a 72% decrease! This means that the insurance company, or its intermediaries, are likely keeping a large amount of money that is leading to higher cost sharing requirements for group plan insureds.
We have surveyed randomly-chosen self-insurance plans to see if this required public disclosure information is being provided. To date, we do not see this information being made publicly available as required. If your self-insured health plan does not have this information publicly available, we are happy to make a request on your behalf, at no charge.
REQUIRED PARTICIPANT DISCLOSURES
All group health plans governed under ERISA must also make specific participant disclosures with respect to cost-sharing liability for covered items and services that the participant expects to require before a procedure or service actually takes place.
The idea of requiring advance explanation of cost-sharing liability is to help an insured predict the amount he or she will need to pay for an item or service before making a treatment decision. In this way, Congress and the Dept. of Labor hope to bring down the overall cost of healthcare, and to introduce competition into the healthcare marketplace.
Upon request by a Plan Participant or Beneficiary, the Plan must timely disclose the following information:
(1) an estimate of cost-sharing liability for a requested item or service;
(2) an in-network rate for the requested item or service;
(3) the out-of-network allowed amount, if the proposed provider is out of network; and
(4) if the requested item or service is subject to a bundled payment arrangement, a list of the items and services included in the bundled payment arrangement.
THE ROLE OF ERISA
The historical pricing information for Out-of-Network billed charges (and allowed amounts) and Prescription Drug billing information must be updated monthly, on a publicly-available website.
The goal of Transparency in Coverage is to help an insured predict the amount he or she will need to pay for an item or service before making a treatment decision.
Importantly, ERISA provides the proper mechanism of enforcement for participants in group health plans, since the plan fiduciary has a duty to implement these new laws for the benefit of all members of the group plan. These rules fall under the heading of Transparency in Coverage.
We at McBride PC are happy to step in and write a letter for you to enforce your rights to this information from your group health plan insurer–at no charge. Just give us a call and we’ll get on it: (213) 600-6077
Frequently Asked Questions re: Transparency in Coverage
What public disclosures are required of a group health plan?
Generally, a group health plan must disclose, on a publicly-available website, the following:
(1) amounts a plan is contractually obligated to pay to in-network providers for covered items and services;
(2) bills submitted by out-of-network providers, and amounts authorized for payment for a specified period;
(3) in-network contract rates for pharmaceutical drugs, together with historic net prices paid to in-network pharmaceutical drug providers for a specified period.
How are in-network rates determined?
In-network rates are determined in the following order:
(1) the first reference point is a negotiated contract between a plan and provider, if it exists, that specifies the contract rate for covered items and services.
(2) if no negotiated contract exists, the next reference point is the “detrived” amount, which is the price that a group health plan or health insurance issuer assigns to an item or service for the purpose of internal accounting, reconciliation with providers;
(3) finally, if a plan dos not have a negotiated contract or an internal price sheet for the item or service in question, the next reference point is the “underlying fee schedule rate,” which is the rate a plan uses to calculate a participant’s cost sharing liability for the item or service in question.
What is the time period for historic price disclosure requirements?
Historic pricing information for:
-amounts paid for pharmaceutical drugs to in-network providers; and
-amounts billed by, and paid to, out-of-network providers
must be disclosed for the 90-day period that begins 180 days before the reporting deadline. (This time lag allows the plan time to gather and report prices.)
Are medical devices subject to Transparency in Pricing requirements?
Yes. Pricing information for all covered items and services should
be available, including pricing for durable medical equipment (DME) or other medical devices that are supplied to a participant or beneficiary under a plan.
What is the purpose of requiring participant disclosures re: healthcare pricing?
The purpose of requiring participant disclosures is to inform a healthcare consumer as to his or her estimated cost-sharing liability before the medical procedure takes place. In this way, insureds have greater control over the amount of cost-sharing liability they will be expected to pay.
Think of this disclosure as an estimated EOB in advance of a procedure.
How does a plan participant or beneficiary obtain this information?
A plan participant or beneficiary can obtain an estimate of cost-sharing liability by making a request of the plan participant in writing. The request can be submitted by the participant or his or her authorized representative.
Have Questions about your Pension or Benefits Plan?