If you’re an employer who has not yet made public your in-network negotiated rates, out-of-network billed charges, and historically allowed amounts, you have less than two weeks to complete this task.
This rule came into being through a series of overlapping transparency rules passed by congress in 2020 and 2021. Some were a part of a rulemaking from 2020 (the “Transparency in Coverage Rules” or “TiC Rules”), while others were enacted as part of the Consolidated Appropriations Act, 2021 (the year-end 2020 COVID relief bill or the “CAA”)).
Most fully-funded employers are conforming to this rule by simply ensuring that their carrier partners are making this information publicly accessible. Other employers, especially those who are self-funded, are conforming to this rule by accessing and posting links on their websites, which are being provided by insurance carriers or third-party administrators (TPAs) who are hosting these rates and historical payments on their own websites. Still, other employers are publishing this information directly on their own websites.
That said, employers and group health plans must familiarize themselves with this disclosure requirement as insurance carriers and TPAs expect group health plan sponsors to assist them with posting the machine-readable files.
Here’s a recap of what the Transparency Rules entail;
TRANSPARENCY RULESAs discussed in prior compliance articles, the Transparency Rules require that non-grandfathered insured and self-insured group health plans post machine-readable files on a public site no later than July 1, 2022. For this purpose, a public site is a site that can be accessed by any individual without the use of a log-in or password, or any other form of identifier.
The machine-readable files should report:
- In-network providers (INN): Publish negotiated rates for all covered items and services between the plan or issuer and in-network providers.
- Out-of-network providers (OON): Publish the historical payments to, and billed charges from out-of-network providers (a minimum of at least 20 entries is required to protect consumer privacy).
Plans are not required to post machine-readable files on pharmacy in-network negotiated rates and historical net prices for all covered prescription drugs until guidance is released by the DOL on this matter.
CONTENT OF THE FILESPlans are required to disclose in-network provider rates for covered items and services and out-of-network allowed amounts and billed charges for covered items and services. The files must include billing codes used to identify the item or service such as the Current Procedural Terminology (CPT) code, Health Common Procedure Coding System (HCPCS) code, Diagnosis-Related Group (DRG) code or the National Drug Code (NDC) or other common identifiers.
Per recent guidance issued by the federal agencies in FAQ 53, self-insured plans and insured plans are required to publish for in-network services, all applicable rates in dollar amounts, to the extent available, which may include one or more of the following:
- Negotiated rates,
- Underlying fee schedule rates, or
- Derived amounts for all covered items and services: if the alternative payment methodology does not fall within the specified schema, or if additional information is required to describe the payment parameters, the plan may include a description of the formula, variables, methodology, or other information necessary to understand the arrangement
- However, for alternate payment modalities such as referenced-based pricing, bundled payments, or capitation fees, the plan should also include the underlying fee schedule rates, if available, in addition to the negotiated rates or derived amounts.
Additionally, if a plan agrees to pay an in-network provider a percentage of billed charges and is not able to assign a dollar amount to an item or service prior to a bill being generated, plans are allowed to report a percentage number, in lieu of a dollar amount.
For example, if a negotiated arrangement for a particular item or service provides for reimbursement for 70% of billed charges, and the plan is unable to ascertain the dollar amount that will be billed for the item or service in advance, plans will be allowed to report the in-network rate using the applicable percentage of 70.
For out-of-network charges or services, the machine-readable file must include the historical payments to, and billed charges from, out-of-network providers for all covered items and services. However, guidance states that the data does not have to be reported if the provider has fewer than 20 claims for the item or service during the reporting period.
WHAT TO DO NOW?Self-Insured/Level-Funded: Sponsors of self-insured or level-funded plans should consider taking the following steps:
- Determine if the TPA will be preparing and making available machine-readable files that conform with the schema issued by the DOL/CMS.
- Identify if the plan provides alternative payment methodologies to determine if special description of formulas or percentages will be required for certain procedures or services.
- Confirm the date the TPA will be making available the machine-readable files for INN and ONN services.
- Identify whether the employer/plan sponsor or TPA will be posting the machine-readable files on a public site. Note most large TPAs will require that the sponsor of the self-insured medical plan post the files on their public website.
- If the employer is required to post, post the machine-readable files on a public website no later than July 1, 2022.
- If the TPA will be posting the files to its site, post a link to the TPA’s site on the employer’s public site no later than July 1, 2022.
- Review any contracts (if any) provided by the TPA regarding the cost and requirements for providing these services.
Fully Insured: Plan sponsors of fully insured medical plans should consider proceeding as follows:
- Determine if the insurance carrier will be hosting on their public site the machine-readable files or expects the plan sponsor/employer to post the machine-readable files on their own public site.
- Determine the date the machine-readable files will be made available by the insurance carrier
- Identify the plan or plans sponsored by the plan sponsor/employer and retrieve the links to the machine-readable files for INN and ONN services for each plan (to the extent the files are posted on the insurance carrier’s site).
- Post the machine-readable files on the employer/plan sponsor’s public website (if the carrier will be delegating this task to the employer/plan sponsor) no later than July 1, 2022.
- If the carrier is not delegating this task to the employer/plan sponsor, consider posting a link to the insurance carrier’s website on the employer’s public site no later than July 1, 2022. (This may not be required if your contract with the carrier states that the carrier is fully responsible for the posting of the files.)
As we fast approach the July 1, 2022 deadline to post these files it is important for plan sponsors to understand what their insurance carrier or TPA will be requiring them to do and the timeline that the carriers and TPAs will be making the files available for posting.
Employers who do not host a public site may be required to work with their insurance carrier or TPA to determine if the insurance carrier or TPA will host a site in their name, or if the employer will be required to create a public site for the purpose of posting the files.
If you have any questions, please contact your JP Griffin Group/HUB Advisor. View more compliance articles in our Compliance Directory.
JP Griffin Group, a division of Hub International Limited, nor Hub International Limited, nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization’s or individual's specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your or your organization’s particular needs.