Transparency In Coverage: Machine-readable Files

In response to President Trump’s executive order Improving Price and Quality Transparency in American Healthcare (2019), the Departments of Labor (DOL), Health & Human Services (HHS) and the Treasury have issued Transparency in Coverage regulation (TiC Final Rules) regarding new transparency in coverage requirements.

Self-insured group health plans and health insurance issuers offering non-grandfathered health insurance coverage in group markets are required to make available to the public (including stakeholders such as consumers, researchers, employers, and third-party developers) three separate machine-readable files that include detailed pricing information.

• The first file must show negotiated rates for all covered items and services between the plan or issuer and in-network providers.
• The second file must show both the historical payments to, and billed charges from, out-of-network providers (historical payments must have a minimum of 20 entries in order to protect consumer privacy).
• The third file must detail the in-network negotiated rates and historical net prices for all covered prescription drugs by plan or issuer at the pharmacy location level.
  • Following the enactment of the Consolidated Appropriations Act, 2021 (CAA) which imposes potentially duplicative and overlapping reporting requirements for prescription drug, the Departments are currently considering whether the prescription drug machine-readable file requirement remains appropriate.

The effective date of this requirement is July 1, 2022.

Self-insured group health plans and issuers must display these data files in a standardized format and provide monthly updates. The machine-readable files may be “hosted on a third-party website” and self-insured group health plans administrators may contract with third parties to post the file; however, “if a plan or issuer chooses not to also host the file separately on its own website, it must provide a link on its own public website to the location where the file is made publicly available.”

Enforcement of this requirement is likely to come from HHS’s Centers for Medicare & Medicaid Services (CMS).  Beginning July 1, 2022, CMS may take several enforcement actions due to non-compliance including: requiring corrective actions and/or imposing a civil money penalty up to $100 per day, adjusted annually, for each violation and for each individual affected by the violation.

Each third-party administrator (TPA) is assisting their clients in a different manner.  Please see the below information as to how your TPA is making the files available to your organization.