This is the second installment of a two-part blog post series discussing the history of Federal policymaking to increase the transparency of medical prices and health claims data, followed on with a conversation about efforts self-insured health plan sponsors are taking to access their plan’s own data. Read the first installment.
Even With the Gag Clause Prohibition, Sharing the Data Remains Limited
As noted in our first blog post, the Federal guidance issued on the Gag Clause Prohibition confirmed that agreements between a group health plan and the owner of a provider network or TPA cannot include a contractual provision that restricts access to the plan’s (1) pricing information and (2) de-identified health claims data (including allowed amounts, service codes and encounter data). The guidance goes on to define the meaning of a “gag clause” as a contractual term that directly or indirectly restricts specific data and information that a group health can make available to another party (e.g., a plan sponsor of the group health plan).
Based on this guidance – and also based on a good faith interpretation of the statute – it would seem that plan sponsors can now get their hands on their plan’s own pricing and health claims data. But in practice, plan sponsors continue to wrangle with owners of the provider networks (in particular, insurance carriers “renting” their network to the plan).
For example, while some carriers that “rent” their provider network to a group health plan have agreed to eliminate restrictive “gag clauses” in their agreements with the plan (in compliance with the Gag Clause Prohibition), these same carriers are continuing to refuse to share the data, arguing that the agreements between the carrier and those medical providers participating in the carrier’s network prohibit the data-sharing. These carriers contend that their agreements with participating providers (i.e., “downstream” agreements) take priority over any agreement between the group health plan and the carrier (as the owner of the provider network), thereby side-stepping the application of the Gag Clause Prohibition.
In other cases, a group health plan enters into an agreement with an independent TPA under which the TPA then separately contracts with the owner of a provider network (i.e., an insurance carrier) to “rent” this network for the TPA’s plan-customer. Here, the carrier is refusing to share pricing and claims data with the TPA that must otherwise be shared with the plan on account of the Gag Clause Prohibition. Again, the carrier contends that their “lease agreement” with the TPA (i.e., a “downstream” agreement) – which prohibits any data-sharing – takes priority over any agreement the between the group health plan and the TPA, thereby side-stepping the application of the Gag Clause Prohibition.
The inability to access the data is not only frustrating for plan sponsors, but it presents yet another problem for them: The law requires a group health plan to annually submit to the Federal Departments an “attestation” that the plan is complying with the Gag Clause Prohibition. Failure to submit this attestation is a violation of the law, which carries a $100 per day/per member penalty. However, how can a group health plan attest that it is complying with the Gag Clause Prohibition if insurance carriers (i.e., the owners of the provider networks) still refuse to share the data that is otherwise required to be available on account of the Gag Clause Prohibition?
If the answer is that, technically speaking, the group health plan is complying with the Gag Clause Prohibition because there is no contractual “gag clause” in the agreement between (1) the group health plan and (2) the owner of the provider network (i.e., an insurance carrier), yet the plan and its plan sponsor can still not access the data on account of the carrier’s “downstream” agreements (e.g., network “lease agreements” or agreements with participating providers). This would wholly corrupt the intent of Congress and call into question the integrity of enforcing this legal requirement.
Lawsuits to Obtain Pricing and Health Claims Data
A series of recently filed lawsuits may have a significant impact on a group health plan’s and its plan sponsor’s ability to access the plan’s own pricing and health claims data.
For the first time, we are seeing sponsors of a self-insured plan argue that the plan’s TPA (here, an insurance carrier-owned TPA that offers the plan access to the carrier’s network of providers) is violating the Gag Clause Prohibition by refusing to share pricing and claims data with the plan. This argument is significant because if a court of law agrees that this type of TPA is indeed violating the law for failure to share pricing and claims data with the plan, courts will finally give validity to the Gag Clause Prohibition and its application under the law. These current lawsuits still remain at the District Court level, so only time will tell whether the Gag Clause Prohibition will be given the teeth that Congress always intended.
If, however, a court of law finds that notwithstanding the application of the Gag Clause Prohibition, the carrier’s “downstream” agreements still prevent data-sharing, plan sponsors are advancing yet another argument (actually, two separate arguments) to gain access to pricing and health claims data:
- First, plan sponsors are arguing that the carrier-TPA is a fiduciary (contending that the carrier-TPA has “discretionary authority” over the plan’s assets), and therefore, the carrier-TPA has an ERISA fiduciary duty to share pricing and claims data with the plan to ensure smooth and cost-effective administration of the plan.
- Second, the carrier-TPA’s failure to share pricing and claims data with the plan makes it impossible for the plan sponsor to satisfy its own ERISA fiduciary duties to (1) monitor the plan’s service providers, (2) defray reasonable costs to the plan, and (3) act in the best interest of plan participants, which could result in liability for the plan sponsor if plan participants (and even the Department of Labor [DOL]) sued for these fiduciary breaches.
With respect to the first argument, TPAs go to great lengths to ensure that they are NOT considered an ERISA fiduciary. However, despite any contract language purporting to confirm that the TPA is not a fiduciary, actions taken by the TPA will dictate whether a court of law will find that the TPA is an ERISA fiduciary or not. However, in a number of recent court rulings, TPAs are often times not found to be a fiduciary, indicating that this argument may fail.
However, the second argument (that the failure to share the data makes it impossible for the plan sponsor to meet its own ERISA fiduciary duties) may be compelling to the court, thereby resulting in the court ruling in favor of the plan sponsor and requiring the carrier-TPA to share the pricing and claims data with the plan. But here, the court must first find that the plan sponsor’s need to satisfy its fiduciary duties under ERISA takes priority over the carrier-TPA’s “downstream” agreements.
As stated, these current lawsuits still remain at the District Court level, and it remains unclear how the District Courts will rule. Regardless of the outcome of these ruling, it is highly likely that these decisions will be appealed to the Circuit Court of Appeals, which will add an even longer-tail on to the uncertainty over whether, when, and how a plan and its plan sponsor can access the plan’s own pricing and health claims data. While we wait, maybe Congress and/or the Administration will step in to prohibit contractual restrictions on data-sharing in “downstream” agreements. Maybe not. Stay tuned…
The information provided does not, and is not intended to, constitute legal advice; instead, all information and content herein is provided for general informational purposes only and may not constitute the most up-to-date legal or other information.