Clarified Guidelines and Enforcement Updates on Gag Clause Restrictions and No Surprises Act Compliance

The recent issuance of guidance by the Departments of Labor, Health and Human Services, and the Treasury provides crucial clarifications regarding the enforcement of the Gag Clause Prohibition and provisions under the No Surprises Act (NSA). These updates aim to reinforce compliance requirements for group health plans, health insurance issuers, and their network providers. The guidance emphasizes transparency, proper attestation procedures, and the significance of adhering to restrictions on data sharing and contractual provisions that could limit participants’ protections against unexpected medical bills.

In the evolving landscape of healthcare regulation, understanding the specifics of these federal rules is vital for plan sponsors and administrators. The guidance also addresses the implications of recent court decisions affecting the methodology used to calculate the qualifying payment amount (QPA), which influences out-of-network billing disputes. Additionally, it highlights enforcement relief measures, especially regarding QPA calculations, to accommodate ongoing legal developments and ensure continued compliance.

This overview will explore the key areas covered by the latest guidance, including downstream agreements, data sharing restrictions, the annual attestation process, and updates related to the QPA and dispute resolution processes.

Downstream Agreements and Gag Clause Restrictions

When a group health plan contracts with a third-party administrator (TPA) or other service providers that offer access to a provider network, any subsequent agreements—referred to as downstream agreements—must align with the Gag Clause Prohibition. These downstream arrangements are critical because they often involve multiple layers of contractual relationships, which can inadvertently or intentionally restrict the sharing of de-identified claims data or encounter information.

The Gag Clause Prohibition explicitly prevents plans and issuers from entering into agreements that restrict sharing of de-identified claims data with certain business associates. This restriction aims to promote transparency and facilitate informed decision-making for consumers and regulators. For example, a plan cannot prevent a TPA from sharing aggregated, non-identifiable claims data necessary for oversight or quality improvement initiatives.

The guidance also provides illustrative examples of prohibited clauses related to access to claims and encounter data, although it is not an exhaustive list. Plans and providers must review their contractual language to ensure compliance, especially in downstream agreements, to avoid violations that could lead to enforcement actions.

Attestation Requirements and Compliance Monitoring

Each year, plans and health insurance issuers are required to affirm their adherence to the Gag Clause Prohibition through the submission of a Gag Clause Prohibition Compliance Attestation (GCPCA). The initial attestation was due by December 31, 2023, covering the period from December 27, 2020, or the plan’s effective date, whichever is later, through the end of 2023. Future attestations are due annually on December 31 and must include any non-compliant provisions identified during the reporting period.

Plans and issuers must diligently review existing agreements and promptly identify any provisions that violate the gag clause restrictions. If such violations are discovered, they must be disclosed in the “Additional Information” section of the GCPCA webform. This process ensures ongoing accountability and transparency in compliance efforts.

Protecting Participants from Surprise Medical Bills

The NSA aims to prevent unexpected bills for participants receiving out-of-network services. A key component is the Federal Independent Dispute Resolution (IDR) process that resolves billing disputes between plans or issuers and out-of-network providers. Central to this process is the calculation of the QPA, which serves as the benchmark for determining patient cost-sharing obligations.

The QPA is generally derived from the median of contracted rates for specific services within a geographic region, adjusted for inflation. However, recent legal rulings—such as the vacatur of certain provisions by the U.S. District Court and subsequent reversal by the Fifth Circuit—have complicated the calculation process, especially concerning inclusion criteria for claims and payments, as well as the treatment of bonus or incentive payments.

In response to these legal uncertainties, the departments have extended enforcement discretion until August 1, 2025. This extension provides a grace period for plans and issuers to recalibrate their QPA calculations according to the prior regulatory guidance, helping to avoid potential disputes during this transitional phase.

Additional Considerations for Plan Sponsors

Employer plan sponsors should stay informed about ongoing regulatory updates and court decisions that might impact compliance strategies. Ensuring that all agreements, both upstream and downstream, are free from prohibited clauses is critical. Furthermore, maintaining thorough documentation and timely submission of attestations helps demonstrate compliance and minimizes the risk of penalties.

For further insights into the importance of effective healthcare management and compliance, exploring how a well-structured practice management system can streamline operations may be beneficial. Additionally, understanding the broader context of healthcare systems, such as the features of universal healthcare models, can provide valuable perspective on regulatory requirements and patient protections.

References:
– For guidance on the significance of excellent service standards, visit why is customer service important in healthcare
– To learn about maintaining compliance with healthcare data sharing rules, see what is practice management system in healthcare
– For an overview of healthcare system structures, including universal coverage options, refer to what is a universal healthcare system