April 9, 2021

Transparency in Coverage Pt 1


The Transparency in Coverage final rule is another step toward putting healthcare price information in the hands of consumers to ensure they are empowered with the critical information needed to make informed decisions.

The rule was released Oct. 29, 2020 by the Department of Health and Human Services (HHS), the Department of Labor and the Department of the Treasury. It was published in the Federal Register. The rule states certain information must be made available by health coverage plans, including self-funded employers.

The Transparency in Coverage rule shouldn’t be confused with two other transparency rules tucked in the Consolidated Appropriations Act.

So far, this rule has been somewhat under the radar until recently. Previously, various sources published short summaries failing to capture the scope of the rule. Lacking has been a concise summary of the technical requirements health plans must meet by 2022, and 2023.

Major price, disclosure requirements

There are two major price and disclosure requirements stated within the Transparency in Coverage.

Those are:

  1. Cost Sharing Disclosure of information to plan participants, covered here in Part 1.
  2. Public Disclosure of negotiated rates for in-network providers and allowed amounts for out-of-network providers, which we will cover in Part 2.

Cost Sharing Disclosure Components

The list below is the information a health plan must make available.

While much of it is similar or overlapping information already shared in an EOB – this information must be provided before the service. This will be very difficult for insurers, TPAs, and PBMs and likely impossible for self-funded employer plans on their own.

The required information for 500 identified services or items that must be ready for plan years beginning effective Jan. 1, 2023 (and for all services and items beginning Jan. 1, 2024):

  • Estimated cost sharing liability means consumer share for the service under their health plan.
  • Accumulated amounts means amount due toward a person’s deductible or out-of-pocket expenses, and any accrued limits to service to date.
  • Negotiated rate, refers to dollar payment amount for in-network item or service in order to determine the consumer’s cost sharing portion. These include pharmacy and prescription drugs.
  • Out-of-network allowed amount means the maximum a plan would pay an OON or a covered service or item.
  • Items and services content list, or which cost sharing information is disclosed and available. Bundled services need to disclose each service and the cost sharing amount for the bundle.
  • Notice of prerequisites to coverage means disclosure of prior authorization, step therapies, concurrent reviews or any medical management requirements.
  • Disclosure notice (not to be confused with the other part of the Transparency Rule) means disclosing in plain language five things:
    • Noting an OON provider may bill for the difference between billed charges and the plan’s payments (and copayment/coinsurance); and
    • Statement actual charges may vary from statement;
    • Statement the estimated costs is not a guarantee of coverage;
    • Statement whether copayment assistance counts toward deductibles and OOP maximums;
    • Statement regarding plan determination (or inability to)whether a service or item is preventive – therefore may not be subject to cost sharing (if billed preventive).
  • Internet based self-service tools, is how this information must be available and in real time by request; searchable by billing code, description, and provider identity—to deliver cost-sharing information depending on plan tiering, network, location, dosage, or any other factors! If the consumer asks for the information in paper form, it must be provided within two business days.