DOL Provides Transparency in Coverage Model Disclosures

The DOL recently released model disclosures in relation to the proposed Transparency in Coverage rule, which was issued on November 15, 2019. (We discussed this rule in the November 26, 2019, edition of Compliance Corner.) These model disclosures are designed to assist employer sponsored group health plans (including self-insured plans) and issuers in meeting the new cost-sharing disclosure requirements.

As explained in our previous article, the proposed rule involves two new approaches to promote greater price transparency in the health care system. First, a plan or issuer would be required to provide an individualized estimate of a participant’s cost sharing responsibility for a covered item or service. Second, these entities would be required to publicly disclose negotiated rates for in-network providers and historical out-of-network allowed amounts in standardized files on their website.

The Transparency in Coverage Model Notice (Appendix 1) is designed to illustrate the first obligation to provide a customized participant cost summary upon request. The proposed format includes sections for key terms and explanations of prerequisites or limitations applicable to the cost-sharing estimate. The model language is designed to be incorporated in a website self-service tool or in paper format. Although use of the model is encouraged, modifications and additions are permissible. However, any changes must be consistent with the proposed rule’s content and plain language requirements.

With respect to the second approach, the Negotiated Rate Machine-Readable File Data Elements (Appendix 2) provides a model for posting in-network provider negotiated rates through a machine readable file on the internet. The proposed data elements to be included on the file include the publishing entity, plan and provider information, and specifics regarding the negotiated rates and covered services. Similarly, the Allowed Amount Machine-Readable File Data Elements (Appendix 3) is intended as an example for the required disclosure of out-of-network allowed amounts. The proposed data elements would include detailed historical information, such as a list of the allowed dollar amount for each unique out-of-network covered item or service during a 90 day period beginning 180 days prior to the file’s publication date.

Employers may want to review these model disclosures in conjunction with the underlying proposed Transparency in Coverage rules. However, it is important to recognize that the rules are not currently in effect. Accordingly, changes may occur (which could also affect the model disclosures) prior to finalization.

Transparency in Coverage Model Notice »
Negotiated Rate Machine-Readable File Data Elements »
Allowed Amount Machine-Readable File Data Elements »