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The federal Departments of Health & Human Services (HHS), Labor, and Treasury issued a second round of proposed rules late last week which, when finalized, will solicit utilization and cost data from health insurance carriers, group health plans and air ambulance providers as part of the effort to craft a payment dispute resolution process for out-of-network air ambulance claims. The proposed rules were issued pursuant to the No Surprises Act, which we detailed in an earlier alert.

At the same time, regulators issued proposed rules requiring insurers to disclose to their individual market customers information about compensation paid to the customers’ brokers. These rules are interesting only in that they may reflect a sneak peek at part of what regulators will soon require of brokers, consultants and other vendors serving the group health insurance market. 

Collecting data on air ambulance billing

For a limited two-year period beginning in 2022, HHS will require all group healthcare plans, health insurance carriers and air ambulance providers to report utilization, claims and cost data on air ambulance services to develop a market baseline and inform the balance billing dispute resolution process prescribed by the No Surprises Act. If finalized as drafted, the reporting for calendar year 2022 will be due by March 31, 2023, and the data for calendar year 2023 by March 30, 2024.

Here’s what federal authorities want to know from group healthcare plans about air ambulance claims:

  • Claims adjudication information including outcomes on appeal
  • Certain claims-related payment information (for example, submitted charges, amounts paid by the payor and cost-sharing amounts)
  • Whether the services were provided on an emergency or non-emergency basis
  • Whether the provider of such services is part of:
    • A hospital-owned or sponsored program
    • A municipality-sponsored program
    • A hospital independent partnership (hybrid) program or independent program
    • A tribally operated program in Alaska
  • Whether the transport originated in a rural or urban area
  • The type of aircraft used for the transport (that is, a fixed-wing or rotary-wing air ambulance)
  • Whether the air ambulance service provider has a contract with the plan or insurer to furnish air ambulance services
  • Other information regarding providers of air ambulance services as specified by the Departments

Lockton comment: HHS is also requiring air ambulance providers to report base rates, patient-loaded mileage rates, average trip costs and reimbursements to complete the market picture.

The brightest spot of light in these rules is that HHS is rightly assuming that plans may want to offload the reporting onto the carriers and third-party claims administrators (TPAs) who ultimately have the best access to the data. HHS will allow a group healthcare plan to arrange for the plan’s insurance carrier or TPA to report to HHS on its behalf if the contract between the plan and carrier/TPA requires the carrier or TPA to furnish the necessary disclosures for air ambulance services (that is, under an agreement between the plan and insurer).

The carriers and TPAs may charge plans for this service but this will probably be money well spent for the plan sponsor to avoid the administrative headache of taking on the responsibility in-house. Of course, self-insured plans will want some kind of proof from the carrier/TPA that the filing occurred as the plan has an overarching duty to monitor its service providers and could be held liable if the carrier or TPA fails to satisfy the reporting requirements on the plan’s behalf.

Lockton comment: In a particularly interesting twist, the Departments have indicated that carriers and TPAs will be able to submit information on behalf of more than one plan in a single submission.

To great anticipation of big data researchers and claims payors everywhere, HHS (in coordination with the Department of Transportation) will be issuing a public report which analyzes the collected market data regarding claim frequency, average charges, reimbursement rates, out-of-pocket expenses for claimants and the frequency of balance billing.

Compensation disclosures

The second major transparency-related component of these rules requires health insurers to report to HHS and disclosure to individuals any direct or indirect compensation they provide to agents or brokers. While this installment of compensation disclosure rules only provides guidance relating to the short-term, limited-duration insurance (STLDI) and individual market coverage, it is interesting because we anticipate similar but more extensive rules will apply to group healthcare plan brokers, consultants and other vendors — rules we are likely to see later this year. 

The disclosures for STLDI and individual coverage will be in chart form and must be provided prior to the policyholder making a final enrollment decision and upon renewal. The compensation information must specify the commissions paid by the insurer, distinguish between new enrollment and renewal commissions, and explain the qualifying thresholds for the payment of any indirect compensation (such as retention or persistency bonuses, etc.).