PPI in the News Compliance Corner - September 29, 2022 Archive
You are here: Home / PPI in the News / Compliance Corner - September 29, 2022 Archive

On September 16, 2022, the Office of Personnel Management, IRS, EBSA and HHS (the agencies) released a request for information regarding the transfer of data from providers and facilities to plans, issuers and carriers; other policy approaches; and the economic impacts of implementing these requirements. The request is part of a rulemaking process for the advanced explanation of benefits (AEOB) and good faith estimate (GFE) requirements of the No Surprises Act (NSA).

Under the NSA, healthcare providers must provide a GFE of the expected charges for providing an item or service, along with the expected billing and diagnostic codes for these items or services to the plan, issuer, or carrier that covers a person seeking that item or service. The GFE must also include any items or services that the provider reasonably expects to provide in conjunction with the requested items or services, including those provided by another provider or facility. If a plan, issuer or carrier does not cover the person seeking the item or service, then the provider delivers the GFE directly to that person.

In addition, the NSA requires group health plans and health insurance issuers that receive a GFE to send to the covered person seeking an item or service an AEOB in clear and understandable language upon that person’s request. The plan or carrier must provide an AEOB to the covered individual (either electronically or by mail) no later than one business day after the plan or carrier receives the GFE. However, the plan or carrier must provide an AEOB to the covered individual within three business days after the date on which the plan, issuer or carrier receives the GFE or request if such item or service was scheduled at least 10 business days before such item or service is to be furnished. The AEOB must include the following information:

1. The network status of the provider or facility.
2. The contracted rate for the item or service, or if the provider or facility is not a participating provider or facility, a description of how the covered individual can obtain information on providers and facilities that are participating.
3. The GFE received from the provider or facility.
4. A GFE of the amount the plan or coverage is responsible for paying.
5. The amount of any cost-sharing that the covered individual would be responsible for paying with respect to the GFE received from the provider or facility.
6. A GFE of the amount that the covered individual has incurred towards meeting the limit of the financial responsibility (including with respect to deductibles and out-of-pocket maximums) under the plan or coverage as of the date of the AEOB.
7. Disclaimers indicating whether coverage is subject to any medical management techniques (including concurrent review, prior authorization and step-therapy, or fail-first protocols).

The agencies’ request for information encompasses a wide variety of subjects, with a focus on the standard for exchanging the required data and the costs for implementing the standard. The agencies have not established regulatory standards for the exchange of GFE and AEOB data from providers and facilities to plans, issuers and carriers. The request seeks input regarding the use of a standard that supports interoperability and securely facilitates the exchange of healthcare information between systems, including the development of implementation guides and application programming interfaces that follow that standard. The agencies also want input regarding the costs of implementing a standard, such as the costs for verifying whether the person seeking the item or service is enrolled in a health plan and verifying the coverage for each item or service at issue in the GFE or AEOB. The agencies also seek information on the potential impact of implementing a regulatory standard on small, rural, or other providers, facilities, plans, issuers and carriers, and any barrier those small or rural providers, plans and carriers may encounter when implementing a standard.

Among other issues, the agencies request input regarding any privacy concerns for the transfer of PHI that would be part of the GFE and AEOB data exchanged between providers, plans and carriers. The agencies also seek input regarding whether information concerning the waiver of the NSA’s surprise billing protections (in cases where that is permitted) should be included in the AEOB or GFE and whether the plans or carriers should provide the AEOB to the provider as well as to the person seeking the item or service.

Employers, particularly those with self-insured health plans, should be aware of this request for information. The deadline to submit information to the agencies pursuant to this request is November 15, 2022.

Request for Information: Advanced Explanation of Benefits and Good Faith Estimate for Covered Individuals »

On August 15, 2022, the US Court of Appeals for the Fourth Circuit held in Roberts v. Gestamp West Virginia, LLC, that a jury must decide whether an employee’s Facebook message to his supervisor satisfied the notice requirements under the Family and Medical Leave Act (FMLA).

The employee underwent emergency surgery in 2019 and sent his supervisor a Facebook message indicating he would miss two weeks of work due to the surgery. The employee and his supervisor communicated via Facebook during his leave, including the need for additional time off. The employee successfully returned to work for four days before experiencing additional pain. The employee met with his supervisor to discuss additional time off to recover and sent additional Facebook messages indicating he was readmitted to the hospital. The supervisor did not respond to those messages and reported his absences to Human Resources. When the employee finally returned to work, he was informed his employment was terminated due to job abandonment.

For leave to be covered under the FMLA, the employee must notify the employer of the need for leave. The FMLA requires employers to have “usual and customary” absentee notice procedures. This employer’s written policies required employees to utilize a call-in line to notify of a late arrival time or an absence on the scheduled workday. If an employee misses three consecutive shifts without calling in, the policy considers it job abandonment and the employee is terminated.

In Roberts v. Gestamp West Virginia, LLC, the employee was terminated while on leave for a health issue and filed suit alleging FMLA retaliation, FMLA interference and wrongful discharge. The former employee argued he properly notified his supervisor while out on leave, and his absences should not have been considered job abandonment. A district court granted summary judgment for the company on all counts, and the former employee appealed. The Fourth Circuit affirmed the lower court’s ruling on FMLA retaliation and wrongful termination, but it vacated the judgment on FMLA interference. The Fourth Circuit concluded that although the employer had a written leave policy because the supervisor had previously accepted the informal absentee notifications through Facebook, a reasonable jury could find that these Facebook messages satisfied the employer’s “usual and customary” notice procedures under the FMLA.

This case provides an important reminder to employers that not only do they need to have written policies and procedures in place, but supervisors need to be trained in how to properly implement the policies. Allowing informal notifications may lead to an expanded “usual and customary” notice procedure. If supervisors are notified of an employee’s potential need for medical leave, it is important to engage with the Human Resources department to ensure proper procedures are followed.

Roberts v. Gestamp West Virginia, LLC»

On September 16, 2022, the DOL published an Initial Regulatory Flexibility Analysis (IRFA) on a proposed amendment to the qualified professional asset manager (QPAM) class prohibited transaction exemption, PTE 84-14. This exemption permits an investment fund managed by a QPAM to engage in certain party-in-interest transactions that would otherwise be prohibited by ERISA and the Code. As reported in our August 2, 2022, article, the DOL recently proposed to amend several aspects of the QPAM exemption qualifications to ensure the protection of retirement plan assets and participants.

Among other items, the proposed amendment increases the current asset management and equity thresholds for QPAM eligibility and provides for subsequent annual inflation adjustments to these thresholds. The thresholds are intended to ensure that eligible fiduciaries managing retirement funds are established institutions that are large enough to discourage the exercise of undue influence upon their decision-making processes by parties in interest.

The Regulatory Flexibility Act requires an agency to present an IRFA on a proposed amendment unless the DOL certifies the proposed amendment would not have a significant economic impact on a substantial number of small entities. The DOL acknowledges that the proposed increases to asset management and equity thresholds for QPAM eligibility could potentially result in some small entities no longer being able to rely upon the exemption. Additionally, to the extent retirement plans that are small entities are more likely to hire a QPAM that is a small entity, the proposed amendment could also impact such plans. For purposes of this IRFA, the DOL considers a plan with less than 100 participants to be a small entity. However, the DOL estimates the percentage of such plans to be small. The IRFA analyzes and seeks public comment on potential economic impacts of the proposed QPAM Amendment on small entities.

The IRFA also considers the possible cost impact of the proposed amendment’s various provisions on all QPAMs, including those who have engaged in certain types of misconduct. The tables summarize the estimated annual costs associated with the amendment for QPAMs in compliance with the exemption, QPAMs with prohibited misconduct and QPAMs with convictions.

The DOL requests comments on the IRFA by October 11, 2022, which is the same deadline as the extended comment period for the proposed QPAM amendment. However, the DOL will provide additional time for public input on all aspects of the proposed QPAM amendment (including the IRFA) following a public hearing scheduled for November 17, 2022.

Federal Register: Initial Regulatory Flexibility Analysis for Proposed Amendment to Prohibited Transaction Class Exemption 84-14 (the QPAM Exemption) »

To comply with Medicare Part D, an employer that sponsors a group health plan offering prescription drug coverage must satisfy two basic disclosure requirements.

First, the plan must notify all Medicare Part D eligible individuals whether or not the prescription drug coverage is creditable, meaning it is expected to pay on average as much as the standard Medicare Part D coverage. The creditable status of the coverage can be determined through actuarial analysis or via the CMS Creditable Coverage Simplified Determination. If a plan has several benefit options (e.g., PPO and HMO), the creditable coverage status must be determined separately for each option. However, generally, an employer can provide a single notice for an HRA integrated with a major medical plan.

CMS has provided Model Disclosure Notices (in English and Spanish) that an employer may use to meet this requirement. The notice must be provided annually prior to October 15, which is the beginning of the annual enrollment period for Medicare Part D. The notice must also be provided when a Medicare Part D eligible individual joins the plan, when the creditable coverage status changes, or upon request.

Medicare Part D eligible individuals may include active employees, disabled employees, COBRA participants and retirees, as well as their covered spouses and dependents. Because an employer cannot always identify these individuals (particularly if eligibility is not based on age), a practical approach is to provide notices to all enrolled in or eligible to enroll in the prescription drug coverage. Generally, a single disclosure notice may be provided to the employee and any dependents residing at the same address; the employee should be instructed to share the notice with any Medicare Part D eligible dependents. The Medicare Part D notice may be provided separately or combined with other benefit materials, such as enrollment packets, provided the notice is “conspicuous and prominently presented” in accordance with specific CMS instructions.

An employer may distribute the Medicare Part D notice by hand, by mail or by electronic delivery (in accordance with the DOL electronic disclosure safe harbor). Under this safe harbor, employees with integral access to the employer’s computer system at work can be defaulted to electronic delivery, with the option to opt out. For this population, if the employer posts the notice on the intranet, the employer must notify employees (e.g., via email) of the notice availability and significance, and the right to request a paper copy. Those without integral access to the employer’s computer system as part of their job would need to affirmatively consent to electronic delivery in accordance with the DOL guidance.

The purpose of the disclosure is to enable Medicare Part D eligible individuals to make informed decisions regarding their coverage and compare the available options. The notice is important because individuals who do not maintain creditable coverage for a period of 63 days or longer following their initial enrollment period for Medicare Part D are subject to late enrollment penalties. The penalties are based on the duration of the lapse in creditable coverage and continue for the duration of the Part D coverage. Although there are no specific employer penalties associated with this notice requirement, failing to provide the notice may be considered a breach of an employer’s fiduciary obligations to the plan.

The second requirement is that an employer must disclose the plan’s creditable coverage status to CMS within 60 days of the start of each plan year . A disclosure to CMS must also be made within 30 days of any change in the creditable coverage status or the termination of the plan. The process involves completion of a disclosure form on the CMS Creditable Coverage Disclosure webpage, which must be signed electronically by an individual authorized by the plan. For access to the form and related CMS guidance and instructions, please see: Disclosure to CMS Form and Disclosure to CMS Guidance and Instructions | CMS