Transparency in Coverage

By Michelina Covey

As we approach July 1st, employers are faced with another compliance provision of the Transparency in Coverage (TiC) rules released by the Departments of Health and Humans Services, Labor and Treasury (the Departments) in late 2020.  But what does all of this mean? What do the files need to include? What are the files?  Where do they need to be posted? Will the average person be able to pull up our employees’ health information? What if we don’t want to publish the files?

If you find yourself asking these questions, you’re not alone. There have been a lot of questions circling this very topic since the beginning and we’re sure there will be more to come as we approach the July 1st compliance deadline.  That said, let’s try to break this down a bit more.

Effective July 1st, plan sponsors are required to disclose, on a public website, detailed pricing information as it relates to their plan’s in and out of network pricing.  Specifically speaking, the required files should be posted in three (3) separate machine-readable files (MRF):

  1. In-network Rate File: In-network provider rates for covered items and services;
  2. Allowed Amount File: Historical payments to and billed charges from out-of-network providers. This file should include at least 20 historical entries to help protect individual participant privacy; and
  3. Prescription Drug File: In-network negotiated rates and historical net prices for covered prescription drugs. Note: this particular MRF requirement has been delayed until further notice.

The MFRs must be posted on a public website where they are publicly accessible to any person, free of charge and without restrictions such as: account set up, user name, password or other self-identifying information.   The Departments have not identified a specific location for where the files should be located, rather they should be located in a place that is most easily accessible by intended users.

Plans and issuers must update each of the MRFs on a monthly basis to ensure it remains accurate.  Additionally, the files must clearly indicate the date they were last updated.  and must clearly indicate the date the files were most recently updated.

 Now that we know what the files are, who needs to post the MFRs?  Is it self-insured or fully-insured plans or level funded?

The answer to that is: C, all of the above.  All plans need to post their respective MFRs on a public website.  What changes is who posts the files and whose assumes liability for non-compliance.

 Self-insured and level funded plans: Employers who fall under these categories can either post the MFRs themselves on a public website or contract with a Third Party Administrator (TPA) to provide the required disclosures. However, it is important to note: it is ultimately the responsibility of the plan to ensure the required information is provided.

Should an employer choose to use a TPA, it is still currently unclear whether the employer must also provide a link on their own public website to the location where the file is publicly available.  Until such guidance is received, it is recommended to take a cautious approach which is for these employers to also post a link to such files on their public website.

Fully Insured funded plans: A fully insured group health plan can satisfy the MRF requirements by entering into a written agreement with the carrier to provide and post the required information.   If the carrier fails to post the required files, the carrier (not the plan) will be held liable.

Will the average person be able to pull up our employees’ health information?

The answer is NO. The final rules define ‘‘machine-readable file’’ as a digital representation of data or information in a file that can be imported or read by a computer system for further processing without human intervention. This ensures the MRF can be imported or read by a computer system without those processes resulting in alterations to the ways data and commands are presented in the file.

The final rules also require each MRF to use a nonproprietary, open format that will be identified in technical implementation guidance—for example, JavaScript Object Notation (JSON), Extensible Markup Language (XML) or Comma Separate Value(s) (CSV). A PDF file would not meet this definition due to its proprietary nature.

And now for the final question:  What if I don’t want to post these files?

Well, aside from being non-compliant, you’ll also run the potential of being fined daily which can get costly.  Although penalties have not been confirmed, they are believed to be $100/day.  Before any employer makes the decision to simply not post the required MFR files, it is highly recommended to contact your employment attorney for guidance.

 As with anything Compliance related, this will require diligence and follow up on the employer’s front to ensure all the requirements have been met.  Although FAQs and guidance have been issued by the Departments, we are still awaiting other guidance.  Until such time, continue to work with your carriers and/or TPAs to ensure you’ve done everything you can to meet the compliance requirements.