April 12, 2021

Transparency in Coverage Pt 2


There is required public disclosure of negotiated rates and allowed amounts with employer-sponsored health plans.

Beginning with plan years January 1, 2022 plans and insurers must publish three “machine-readable files.”

  1. Negotiated Rate File – the in-network negotiated rates with providers;
  2. Out-of-network Allowed Amount File, outlining the historical amounts for covered items and services provided OON;
  3. Rx Drug File which is pricing information for prescription drugs.

These files are to be updated monthly – and free of charge. Files must contain an identifier for the plan option or coverage of the plan; billing codes for items and services (CPT, HCPCS, DRG or NDC). The Negotiated Rate File must have the dollar amount or other applicable rate by National Provider Identifier, Tax ID, and Place of Service Code.

The rules require inclusion of the underlying fee schedule rates used to determine provider reimbursement.

A Compliance Summary

  • Cost-sharing disclosure required for plan years beginning on or after January 1, 2023.
  • Required public disclosure requirements begin with plan years January 1, 2022 .
  • Insured and self-insured plans must disclose – through a self-service online tool – personalized to the covered member cost sharing information and negotiated rates for 500 medical services (for 2024 expands to all shoppable medical services).
  • There is a safe harbor for fully-insured group health plans that allows for compliance if there is a written agreement with the insurance carrier (hopefully if insurers intend to accept this responsibility).
  • No such safe-harbor is offered to self-insured plans under the rule.
  • It is expected self-insured plans will (should) insist on compliance representations from their TPAs, PBMs, etc.
  • There is relief for “good faith efforts” to comply — which for now seem somewhat vague.
  • Penalties for non-compliance are not clear other than they seem to fall under ACA, which means $100 per day per person impacted.


Next Steps

There are more details, but you get the idea. So where to from here? The general consensus among the legal sphere seems to be:

  1. Get a basic understanding of the Transparency Rule requirements.
  2. Know what plans are impacted (excepted plans are not, such as dental or vision).
  3. Assess which aspects of the rule the plan will undertake (likely easy for fully-insured). For self-funded plans — it comes down to discussions with TPAs and PBMs. There is not much else a plan sponsor/employer can do. So, contacting these vendors to see where they are at in preparing to produce the information. Will they be ready?
  4. Ask TPAs, PBMs, about fees. Presumably, they will charge for this burden. How much?
  5. Develop contracts (or carefully review what vendors put forth) to make sure the Transparency Rule compliance is addressed. Require an indemnification clause should the vendor slip up and put the plan sponsor in harm’s way.
  6. Some are suggesting plan sponsors have a Transparency Rule Compliance Plan to outline the above and to document everything. In that way, even if the vendors are unable to meet the requirements, clients can demonstrate the “good-faith efforts” needed to avoid penalties.

More guidance from regulators and more insight from legal experts are sure to come.