Brief Summary: On February 23, 2023, the Department of Health and Human Services (HHS), the Department of Labor (DOL), and the Department of the Treasury (collectively, the Departments) released an FAQs document detailing the requirements for health plans to submit annual gag clause prohibition attestations to the Departments. The first attestation is due by December 31, 2023. Read on for more information.
CAA Gag Clause Prohibition Background
The Consolidated Appropriations Act of 2021 (CAA), enacted by Congress on December 27, 2020, includes a provision that prohibits health plans (and health insurance carriers) from entering into agreements with health care providers and/or networks, third-party administrators (TPAs), or other plan service providers that include language constituting gag clauses. The FAQs state that gag clauses are contractual terms that directly or indirectly restrict specific data and information a plan can make available to another party. In this context, gag clauses contain language that directly or indirectly restricts a plan from:
- Disclosing provider-specific cost or quality of care information, through a consumer engagement tool or any other means, to referring providers, the plan sponsor, plan participants, and other individuals eligible to enroll in the plan.
- Upon request, obtaining electronic access to de-identified claims and encounter data for each plan participant (pursuant to applicable privacy regulations), including:
- Claim-related financial information, such as allowed amount
- Provider information, such as name and clinical designation
- Service codes
- Any other data element included in claim or encounter transactions
- Sharing information or data outlined in (1) and (2) above with a business associate of the plan, in accordance with applicable privacy regulations.
CAA Gag Clause Prohibition Examples:
Example 1: A contract between a TPA and a group health plan states the plan will pay providers at certain designated rates, which the TPA considers to be confidential or proprietary and includes language in the contract prohibiting the plan from disclosing those rates to plan participants. This provision prohibiting disclosure would be considered a prohibited gag clause under the CAA.
Example 2: A contract between a TPA and a group health plan provides that the plan sponsor’s access to provider-specific cost and quality of care information is only at the discretion of the TPA. This provision would be considered a prohibited gag clause under the CAA.
Although health care providers and/or networks, TPAs, and other plan service providers may impose reasonable restrictions on the public disclosure of this information, plans must ensure that their agreements with these providers do not contain language in violation of the CAA’s prohibition on gag clauses.
The intention of these gag clause prohibitions, like other CAA health plan provisions, is to increase and enhance health plan cost transparency. See prior Risk Strategies articles detailing other recent plan cost transparency provisions here, here, and here.
Annual Attestation
Health plans are required to submit an attestation on an annual basis confirming their compliance with this gag clause prohibition requirement, as confirmed by this recent FAQs guidance. The first attestation, covering the period from December 27, 2020 through the attestation date is due by December 31, 2023.
After December 31, 2023, gag clause prohibition attestations will be due on December 31st of each year, covering the period since the last preceding attestation.
The Departments created a dedicated website (accessed here) detailing the gag clause prohibition attestation process with helpful resources for health plans, insurance carriers, and other service providers, including links to the attestation submission site, a user manual, and submission instructions.
This annual gag clause prohibition attestation requirement, initially delayed by the Departments until further guidance was issued, is now in effect with the release of these recent FAQs and due by December 31, 2023.
Covered Health Plans
The chart below outlines which plans are subject to the annual gag clause prohibition attestation requirement:
|
Type of Plan
|
Required to submit annual gag clause prohibition attestation? (Yes/No)
|
|
ERISA Group Health Plan[1]
- fully insured plans
- self-funded plans
|
Yes
|
|
Non-federal governmental plans[2]
|
Yes
|
|
Church plans
|
Yes
|
|
Individual health coverage plans
- Student health plans
- Association plans
|
Yes
|
|
Excepted benefit plans
|
No
|
|
Short-term, limited duration plans
|
No
|
|
Health Reimbursement Arrangements (HRAs) and other account-based plans, such as health Flexible Spending Accounts (FSAs)
|
No
|
|
Medicare and Medicaid plans
|
No
|
|
Children’s Health Insurance Program (CHIP) plans
|
No
|
|
TRICARE and Indian Health Service program plans
|
No
|
Enforcement
If a plan does not submit their first annual attestation by December 31, 2023, the Departments may initiate appropriate enforcement action against the plan.
Next Steps for Employers
Practically, employers sponsoring group health plans will need to rely on their carriers, TPAs, and other plan service providers to comply with these CAA gag clause prohibition rules since employers do not typically enter into agreements directly with health care providers and networks on behalf of their group health plan.
Compliance with CAA gag clause prohibition: Employers sponsoring group health plans are advised to confirm with their carriers, TPAs, and other plan service providers that all existing plan-related contracts do not contain prohibited gag clause language.
Annual attestation submission:
- Fully Insured Medical Plans: Employers with fully insured group health plans may rely on their insurance carriers to submit their annual gag clause prohibition attestation. The FAQs confirm that fully insured plans will be considered in compliance with this requirement when their carriers submit this attestation on their behalf. For good measure, fully insured plan sponsor employers are encouraged to receive written confirmation from their carriers that they will submit the first required attestation in a timely manner, well in advance of the December 31, 2023 deadline.
- Self-Funded Plans: Employers with self-funded group health plans (including level-funded plans) are directly responsible for the attestation requirement but may contract with their plan service providers (e.g., TPAs, pharmacy benefit managers and/or managed behavioral health organizations,) to submit the attestations on their behalf via a written agreement. However, as with most compliance obligations, if a service provider fails to submit the required attestation, the self-funded plan bears the ultimate responsibility for such failures.
Carriers and other plan service providers will likely reach out to group health plans via email with next steps on completing these gag clause prohibition attestations. Employers are advised to pay close attention to these emails and respond accordingly to ensure timely compliance with these requirements. To avoid duplicate efforts, TPAs of self-funded plans will likely coordinate first with the plan to confirm only one entity (either the TPA OR the plan, but not both) will be submitting the attestation on behalf of the plan, consistent with the FAQs guidance.
Risk Strategies is continuing to monitor these CAA-related guidance developments and will provide updates when available. Reach out to your Risk Strategies representative with any questions or contact us directly at benefits@risk-strategies.com.
[1] Including grandfathered and grandmothered health plans.
[2] Including plans sponsored by states, counties, school districts, and municipalities.
