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Guidance on Gag Clause Provisions

The Departments of Treasury and Labor, Health and Human Services have provided further guidance on gag clause provisions within the private health insurance and public health section of the Consolidated Appropriations Act, 2021 (the CAA). In the joint release, the Departments explained gag clause provisions and provided information on how, where, and when plans need to submit gag clause prohibition compliance attestations. As a plan sponsor, it is important to understand what you need to do in the wake of these gag clause provisions.

Background of The CAA, 2021

The CAA was passed by Congress on December 27, 2020, to establish protections for health care consumers related to surprise billing and transparency. Under the transparency section of the Act is information regarding prescription drug data collection reporting (RxDC) and gag clause prohibition attestations. Both require action from insurance companies and employer-based health plans, which according to the Centers for Medicare & Medicaid Services (CMS), will help to:

  • Identify major drivers of increases in prescription drug and health care spending
  • Understand how prescription drug rebates impact premiums and out-of-pocket costs
  • Promote transparency in prescription drug pricing¹

To obtain information about RxDC reporting options, please contact your CVS Caremark account manager.

Understanding Gag Clauses

Within the CAA, the Internal Revenue Code, Employee Retirement Income Security Act, and Public Health Service Act prohibit group health plans and health insurance issuers from entering into agreements that include gag clauses. A gag clause, defined by the Departments, is “A contractual term that directly or indirectly restricts specific data and information that a health plan or issuer can make available to certain parties.” Moreover, the Acts prohibit group health plans and health insurance issuers from:

“Entering into an agreement with a health care provider, network or association of providers, third-party administrator (TPA), or other service provider offering access to a network of providers that would directly or indirectly restrict a plan or issuer from providing, accessing, or sharing certain information related to cost or quality of care or de-identified claims and encounter information.”

The Departments provided an example to help identify gag clauses. Say a TPA and a group health plan have a contract that states the plan will pay “Point of Service Rates” to a provider. If the TPA considers the rates to be their exclusive right and includes contract language stating the plan may not communicate those rates to participants or beneficiaries, the contract language forbidding the disclosure of the rates is considered a gag clause. Therefore, under the CAA, this agreement would be prohibited.

As a result of the CAA, each year, health plans and issuers must submit proof that the health plan is compliant with the gag clause prohibition requirements. Attestations are collected by the CMS on behalf of the Departments of Treasury and Labor, Health and Human Services. Attestations are needed from health insurance issuers who offer group health insurance coverage or individual health insurance coverage, including student health and individual coverage issued through an association. Fully-insured and self-insured group health plans (ERISA plans, non-federal governmental, and church plans subject to code) also need to submit attestations.²

National CooperativeRx members are required to submit gag clause prohibition compliance attestations.

The Impact on National CooperativeRx Members

National CooperativeRx and our PBM vendor, CVS Caremark (CVSC), will provide information to members for their gag clause prohibition compliance attestations. We do not anticipate any conflicts with our current contract language. CVSC will issue a statement by 10/1/23 about the use of gag clauses that members can use in their submission to the CMS. The first statement will cover the period beginning December 27, 2020, and will be sent to clients by October 1, 2023. Statements will continue to be sent to clients annually.

The Departments state, “The first gag clause prohibition compliance attestation is due no later than December 31, 2023, and covers the period beginning December 27, 2020, or the effective date of the applicable health plan or issuer, if later, through the date of attestation. Subsequent attestations, covering the period since the last preceding attestation, are due by December 31 of each year thereafter.”

Plan sponsors are liable for the failure to provide timely attestation. We recommend plan sponsors and their brokers/agents/TPAs, etc., coordinate to ensure attestations and submittals are completed correctly and promptly.

For a full explanation of the gag clause provisions and who is required to submit attestations, please click here.

For more information and instructions on submitting attestations, click here.

  1. Prescription Drug Data Collection (RxDC). CMS. (n.d.). Retrieved May 1, 2023, from
  2. FAQs About Affordable Care Act and Consolidated Appropriations Act … (n.d.). Retrieved May 1, 2023, from

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