On January 14, 2025, the U.S. Department of Labor (DOL), Health and Human Services (HHS) and Treasury Department jointly issued new guidance in a FAQ format (Guidance) regarding compliance with certain provisions of Title I (No Surprises Act) and Title II (Transparency) of the Consolidated Appropriations Act, 2021. 

This Guidance provides important clarifications on the Gag Clause Prohibition rules that will help group health benefit plans ensure that the federal government’s transparency mandates are complied with and that requests for claims data from health insurance carriers are obeyed.

Background

The Gag Clause Prohibition, enacted under the Consolidated Appropriations Act of 2021 (CAA), includes a set of federal regulations and rules that were designed to promote transparency in the employee benefit and healthcare insurance industries. These regulations prohibit group health benefit plans and health insurance carriers from entering into contracts that restrict access to critical claims data and cost or quality information, or otherwise prevent group health benefit plans or insurance carriers from disclosing such claims data and information to plan participants, beneficiaries, or enrollees; plan sponsors (e.g., employers); or to a plan’s business associate, such as a third-party administrator (TPA) or vendor, consistent with applicable privacy regulations. 

Despite the clear mandates of the Gag Clause Prohibition rules, for the last four years, some health insurance carriers have repeatedly obstructed or refused to adequately comply with the federal transparency mandates. Specifically, some health insurance carriers who own healthcare provider networks and who essentially rent such networks to group health benefit plans have continuously refused to share a complete and accurate set of health claims data either with the plan sponsor or the plan’s business associates. 

Likewise, if a group health benefit plan engaged its own independent TPA with the expectation that they would separately contract with the health insurance carrier who owns the provider network the plan wants access to, the health insurance carrier would refuse to allow the TPA to share a complete and accurate set of health claims data either with the plan sponsor or the plan’s business associates.

In both instances, health insurance carriers would justify their refusal on the basis that their separate “downstream” agreements with their participating provider networks took precedence over the federal Gag Clause Prohibition rules. In essence, they argued their private contractual rights, and confidentiality or data restriction provisions stated therein, allowed them to sidestep the transparency obligations imposed by the federal government.

As a result, group health benefit plans, their sponsors, TPAs and vendors have been advocating for additional guidance or clarification on the federal transparency rules. Some group health benefit plans and plan sponsors have even initiated lawsuits against carriers who refused to provide the plan and plan sponsor their claims data. See e.g., Trustees of the International Union of Bricklayers and Allied Craftworkers Local 1 Connecticut Health Fund et al v. Elevance, Inc. et al, Docket No. 3:22-cv-01541 (D. Conn. Dec 05, 2022); Owens & Minor, Inc. et al v. Anthem Health Plans of Virginia, Inc., Docket No. 3:23-cv-00115 (E.D. Va. Feb 13, 2023).

Updated Guidance

The new Guidance provides the following clarifications:

1. All separate “downstream agreements” that restrict a group health benefit plan or health insurance carrier from providing, electronically accessing, or sharing critical claims data and cost or quality information with a plan sponsor, its participants or beneficiaries, or the plan’s business associates are prohibited.
2. Likewise, owners of provider networks cannot use discretionary language or self-serving contractual provisions (e.g., only allowing de-identified claims data to be shared at “its discretion”) in their agreements with group health benefit plans, providers, TPAs or other service providers which have the practical effect of preventing disclosure of critical claims data, and cost or quality information data, to a plan sponsor or a plan’s business associates, consistent with applicable privacy regulations.
3. Health insurance carriers and provider networks cannot place any limitation on the “scope, scale or frequency of electronic access to de-identified” claims data when requested as part of an audit or claims review.
4. Lastly, most group health benefit plans are likely aware of the Gag Clause Prohibition through compliance with the annual attestation requirement. The Guidance makes clear that plan sponsors, when submitting their annual attestation of compliance, can essentially report any other vendor or carrier who refuses to remove a gag clause in any separate “downstream” agreements if the plan sponsor has taken steps to ensure their own compliance, including requesting the gag clause be eliminated.

Action Steps

In light of the new Guidance, group health benefit plans, plan sponsors and plan vendors should consult counsel to assist with obtaining plan claims data and cost or quality information from carriers, healthcare providers, TPAs or others with control over that data. They should also review their contracts with those entities to help identify and eliminate gag clauses or other restrictive provisions that run afoul of the federal government’s transparency rules.

To the extent any group health benefit plan or plan sponsor receives pushback from a carrier or provider, this new Guidance can be leveraged to challenge the restrictive practices in place and refute any arguments by such insurance carriers and/or providers who may be attempting to sidestep the federal transparency rules. 

Additional Author: Justin Wolber