The Departments of Health and Human Services, Labor, and Treasury (the Departments) released Transparency in Coverage (TiC) rules in late 2020 that will require fully insured and self-funded plan sponsors of non-grandfathered group health plans to make important disclosures about in-network and out-of-network rates beginning July 1, 2022. To be ready to meet that deadline, plan sponsors should be coordinating efforts with carriers and third-party administrators (TPAs), as the case may be, to ensure they have the necessary information in the proper format to comply with the new TiC requirements.
Devil in the Details
The TiC rules originally required certain employers to provide “machine readable” files that disclose in-network rates, out-of-network charges and information relating to prescription drug coverage and costs by January 1, 2022. Last year the Departments delayed enforcement of the prescription drug coverage rules indefinitely until they issue additional guidance. However, plan sponsors should be taking steps now to ensure they can publish the required in-network negotiated rates and out-of-network allowed amounts as laid out in the TiC rules by the new July 1 deadline.
The first required file (In-Network Rate File) must show a plan’s negotiated rates for all covered items and services between the plan or carrier and all in-network providers. The second file (Allowed Amount File) will show both the historical payments to, and billed charges from, out-of-network providers. Plan sponsors must be sure this file includes at least 20 historical entries to safeguard individual privacy. The departments have indicated they will provide more specific guidance as to format and content, but so far have not released more details than what we know from the final rules.
The machine-readable files must include:
• For each option a group medical plan or carrier offers, the identifier for each such option. The identifier is either the insurer Health Insurance Oversight (HIOS) identifier, or if the plan or insurer does not have a HIOS number, the employer identification number (EIN).
• A billing code, which can include a Current Procedural Terminology (CPT) code, Healthcare Common Procedure Coding System (HCPCS) code, Diagnosis-related Group (DRG) code, or a National Drug Code (NDC) or any other common payer identifier. This content element also requires a plain language description for each billing code of each covered item or service.
In-Network Rate File
The In-Network Rate File must show:
• In-network rates for each item or service provided by in-network providers, including any negotiated rates, fee schedule rates used to determine cost-sharing, or derived amounts, whichever rate is applicable to the plan.
• If a rate is percentage-based, include the calculated dollar amount, or the calculated dollar amount for each National Provider Identifier (NPI) identified provider, if rates differ by providers or tiers. Bundled items and services must be identified by relevant code.
Allowed Amount File
The Allowed Amount File must show:
• Unique out-of-network allowed amounts and billed charges with respect to covered items or services, furnished by out-of-network providers during the 90-day period that begins 180 days prior to the publication date of the file.
• The plan or insurer must omit data for a particular item or service and provider when the plan or insurer would be reporting on payment of out-of-network allowed amounts for fewer than 20 different claims for payment under a single plan or coverage. These amounts must also be expressed as dollar amounts and associated with the NPI, Taxpayer Identification Number, and Place of Service Code for each network provider.
What Should You Do?
Plan sponsors will need to update the information in the required files no less frequently than monthly. This will likely require strong coordination with the carrier in an insured plan and with the TPA in a self-funded plan.
The Departments will require the files to be posted to a public website that consumers can use without providing individually identifiable information. The website should be open access and not require passwords, account setup, login credentials or any other barriers to accessing the required information.
The TiC rules recognize that a plan sponsor might not have its own public website on which it will be able to house the required files. But the rules permit plan sponsors to contract with a carrier, TPA or other third party to produce and house the information on a plan’s behalf. However, plans should be aware that they might ultimately remain responsible for any failures.
A carrier will be responsible for any failure if a plan has required it in writing to ensure a plan’s compliance. Self-funded plans can contract to have another entity provide and update required files, too, but the TiC rules do not provide the same level of protection for any failures by a third party in the self-funded context, so plans should be sure to review relevant indemnification provisions in any third-party vendor service agreement.
Many carriers and TPAs have begun reaching out to employer plan sponsors offering to assist in in providing, preparing, updating, and hosting the required files. Employers should be carefully reviewing their service agreements and related contracts to make certain they include specific provisions dealing with all aspects of the required transparency disclosures.
We will continue to monitor the guidance we expect to be coming soon as to certain administrative requirements regarding formatting and hosting of the required forms and provide updates as needed.
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