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;
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.
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:
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.
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.
DISCLAIMER
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.