Prohibition on gag clauses

The Act prohibits health plans and insurance issuers from entering into contracts with healthcare providers, provider networks, third-party administrators (TPAs) or other service providers that would restrict the plan from providing, accessing or sharing certain information. Specifically, contracts cannot restrict a plan from:

• Disclosing provider-specific cost or quality of care information or data to referring providers, the plan sponsor, participants or beneficiaries, including providing, accessing or sharing the information or data
• Electronically accessing de-identified claims and encounter information or data for each participant, beneficiary or enrollee upon request and consistent with privacy rules under the Health Insurance Portability and Accountability Act (HIPAA), the Genetic Information Nondiscrimination Act and the Americans with Disabilities Act
• Sharing the information or data described above or directing such information to be shared with a business associate, consistent with HIPAA’s privacy rules

Guidance on what constitutes a gag clause

Generally, a “gag clause” is a contractual term that directly or indirectly restricts specific data and information that a plan or issuer can make available to another party.

In the new guidance, the Departments provide two examples of gag clauses prohibited by the No Surprises Act:

1. A contract between a TPA and a group health plan states that the plan will pay providers at rates designated as “point-of-service rates,” but the TPA considers those rates proprietary and the contract states that the plan may not disclose the rates to participants.
2. A contract between a TPA and a plan provides that the plan’s sponsor’s access to provider-specific cost and quality of care information is only at the discretion of the TPA.

The guidance does not provide additional answers to common questions about gag clauses, such as whether a clause in a subcontractor agreement with a service provider would also be subject to the rule. Although the guidance does not give examples of specific contractual provisions that would violate the Act, it states that to the extent a term in a contract, either directly or indirectly, prevents a plan or issuer from providing, accessing or sharing the information or data, as provided for under the statute, that term in the contract violates the gag clause prohibitions and is prohibited. However, the guidance clarifies that healthcare providers, networks, TPAs and other service providers may place reasonable restrictions on the public disclosure of such information.

Annual gag clause attestation process

The Departments require the first gag clause attestation to be submitted by December 31, 2023, covering the period beginning December 27, 2020 (the effective date of the No Surprises Act’s gag-clause prohibition), through the date of attestation. Subsequent attestations, covering the period since the last preceding attestation, are due by December 31 of each following year.

The Departments have created a website for submitting s attestations. The guidance contains instructions and a link to the Gag Clause Prohibition Compliance Attestation  methodology for submitting an annual attestation of compliance with the gag clause prohibition. Attestations will be submitted at this link. Instructions and a system user manual for submitting attestations are available here.

Implications for plan sponsors

Plan sponsors should work with their legal counsel to ensure any contracts with TPAs or other network service providers do not contain gag clauses, as well as prepare to complete the attestation by December 31, 2023. Self-insured plans may enter into written agreements with service providers to complete the attestation on their behalf, but the plan remains legally responsible for compliance. Fully insured plans may provide the attestation on behalf of those plans. Plans that fail to comply may face a civil penalty of up to $100 per day, adjusted annually, for each individual affected by a violation.

The No Surprises Act has an extensive list of healthcare price transparency requirements for group health plans that we’ve summarized in a timeline.