Two Years After Enactment, Industry Still Sorting Out Implications Of Many CAA Provisions

The Consolidated Appropriations Act of 2021 created one of the largest transformations in employee health benefits regulation since 1943. It brought with it new transparency requirements, anti-gag clause requirements, broker compensation disclosure rules and more.

Two years later, it remains a work in progress.

As a caveat, we have this idea that we pass a law and all know what to do,” said Sean Schantzen, founder of Health Rosetta. “The reality is that when you are dealing with complex things, you pass a law and sometimes spend the next five to 20 years figuring out what to do. You may hear a lot of conflicting ideas about what it means. We are still at the stage in these topics in which reasonable minds may differ. We are in the early stages of this.”

Schantzen participated in “From Legislation to Implementation: Assessing the CAA in Action,” a June 30 webinar sponsored by Health Rosetta. Chris Deacon, director of health benefits operation and policy and planning for the state of New Jersey, summarized the transparency act that came through an executive order rather than the CAA itself.

“This is the unofficial CAA, because it came right before it, but it is very much in line with the transparency initiative that the CAA talks about,” she said. “It requires group health plans to post links to machine-readable files containing pricing information on a publicly available website. The use at this time is very limited, because they still are ingesting these massive amounts of data. But this was the first step, and we have more steps to go.”

Schantzen and Deacon summarized other key provisions of the CAA.

Fiduciary responsibilities. “When I hear people say the CAA imposes new fiduciary duties, it makes my hair stand up,” Deacon said. “ERISA plans have always had fiduciary responsibilities. What the CAA did was give them more tools to better fulfill those obligations that already existed.”

Prescription drug data collection. “RXDC requires health plans to submit information regarding not only prescription drug benefits but also health care spending by June 1 each year,” she said. “As far as I have heard, it’s going pretty well. The wildcard question is, what is going to happen with this data at CMS? What are they going to do with it?”

Broker compensation disclosure. “Section 202 of the CAA requires those who are providing brokerage or consulting services to ERISA health plans and expect to receive $1,000 or more in direct or indirect compensation to make full disclosure to their clients,” Deacon said. “It sounds easy, but it has been less than straightforward when it comes to who is providing consultant services.”

Gag clause. “It puts the onus on the employer to not enter into any contract that would preclude that employer or group health plan from directly or indirectly accessing their claims data,” she said. “Ambiguity has been introduced, and it has been carried to the extreme by some of the carriers. What we are seeing in the market is neither reasonable nor what the CAA contemplated.”

As some parts of the CAA come into clearer focus, other provisions will continue to be worked out in coming years.

“Regardless of where this lands as far as interpretation of the legal requirements, the practical thing you should be doing is thinking of this as a floor,” Schantzen said. “Having a really robust strategy as far as what data you are getting, down to getting these fields, how these fields are being interpreted and validated, and how it is being used, goes further than pretty much anything else in effectively helping you spend your money and therefore fulfill your fiduciary duty requirements.”


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