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On April 19, 2022, the Departments of Labor, Health and Human Services, and the Treasury issued additional guidance under the Transparency in Coverage Final Rules issued in 2020. The guidance, FAQs About Affordable Care Act Implementation Part 53, provides a safe harbor for disclosing in-network healthcare costs that cannot be expressed as a dollar amount. They also serve as a timely reminder of the pending July 1, 2022, deadline to begin enforcing the Final Rules.
The Final Rules require non-grandfathered health plans and health insurance issuers to post information about the cost to participants, beneficiaries, and enrollees for in-network and out-of-network healthcare services through machine-readable files posted on a public website. The Final Rules for this requirement are effective for plan years beginning on or after January 1, 2022 (an additional requirement for disclosing information about pharmacy benefits and drug costs is delayed pending further guidance). The Final Rules require that all costs be expressed as a dollar amount. After the Final Rules were published, plans and issuers pointed out that under some alternative reimbursement arrangements in-network costs are calculated as a percentage of billed charges. In those cases, dollar amounts cannot be determined in advance.
FAQ Safe Harbor
The FAQs provide a safe harbor for disclosing costs under a contractual arrangement where the plan or issuer agrees to pay an in-network provider a percentage of billed charges and cannot assign a dollar amount before delivering services. Under this kind of arrangement, they may report the percentage number instead of a dollar amount. The FAQs also provide that where the nature of the contractual arrangement requires the submission of additional information to describe the nature of the negotiated rate, plans and issuers may describe the formula, variables, methodology, or other information necessary to understand the arrangement in an open text field. This is only permitted if the current technical specifications do not support the disclosure via the machine-readable files.
Public Website Requirement
This guidance is pretty narrow and of most interest to plans, issuers, and third-party administrators responsible for the technical aspects of the disclosure. Still, it is a helpful reminder to plan sponsors that the July 1st enforcement deadline for these requirements is rapidly approaching. As a reminder, for fully insured plans the plan sponsor is considered the insurance carrier. However, for self or level funded medical plans the plan sponsor is the employer so they will be the one responsible making sure they are meeting the transparency disclosure requirements. Plans sponsors should remember that these machine-readable files must be posted on a public website. The Final Rules clearly state that the files must be accessible for free, without having to establish a user account, password, or other credentials and without submitting any personal identifying information such as a name, email address, or telephone number. If a third-party website hosts the files, the plan or issuer must post a link to the file’s location on its own public website. Simply posting the files on an individual plan website or the Plan Sponsor’s company intranet falls short of these requirements. Regardless of how a plan opts to comply, The July 1st deadline is right around the corner.
The infamous internal memo concerning eliminating telework at Yahoo was never intended for public release. At the top of the memo the call for privacy was clearly defined as “Proprietary and Confidential Information- Do Not Forward”. However, despite Yahoo’s directive, the memo was leaked on a blog post on February 22, 2013. This leak resulted in a lot of online attention – most of it bad. But it is not the first time a firm’s information has been leaked online and it will not be the last.
Recently, a Groupon CEO tweeted “I was fired today”. As a British entertainment retailer was announcing that it was laying off nearly 200 employees, a member of the company’s social media team took to Twitter and posted “We’re tweeting live from HR where we’re all being fired! Exciting!!”.
It is an aspect of the business world now. From layoffs to policy changes, decisions and information that was intended only for the eyes of your staff may actually be shared with the world via social media now.
The question- what is management to do?
Be Transparent and Proactive
To be transparent is to be clear and concise about expected or even suspected changes that have the potential to be controversial and could cause issues internally with your staff. Employer privacy is very limited and you can not realistically control what someone posts on their blog, Facebook, or Twitter account. Corporate bad news has a way of seeping into the limelight online.
“In the era of social medial and social sharing there’s almost no such thing as a truly internal e-mail announcement,” said Curtis Midkiff, director of social strategy and engagement at SHRM. “There are ways to share confidential information with your employees, but e-mail may not be the most appropriate because it is not a truly private form of communication. You can put as may disclaimers as you want, but when you push send…you always have to be prepared for it to fall in the wrong hands. You should almost pre plan that the e-mail may be seen by unintended audiences.”
One way to pre plan and be proactive is to break the news on social media sites yourself first. For example, Zappos CEO often tweets memos to employees from his Zappos Twitter account. He did so a few years ago when the company announced layoffs.
Another good rule of thumb? Try to limit surprises by including workers in decision early on, if at all possible. There are different obligations depending on if the company is a public or privately held company, but the more input that employees feel they have the better they will handle change in the long run.
Companies can try to soften the blow of bad news by keeping employees in the loop and telling them that change is coming. They can educate their employees on the process so that when the memo actually comes out, they are expecting it and do not freak out and leak it online.
Bad news is never good news and you can strive to be as transparent as possible with information. However, business leaders often have to make difficult and unpopular decisions and it can, in the end, become difficult to manage the emotions or reaction of one employee.