Transparency in Coverage Public Disclosure Requirement Quickly Approaching
Compliance with the Transparency in Coverage (“TiC”) Rule requirement regarding public disclosure of costs related to health plan or insurance coverage is quickly approaching. As most health plans, insurance issuers, and employers know, these rules impose new obligations related to increasing transparency in health care price information. Beginning July 1, 2022, health plans or insurance issuers must disclose certain machine readable files (“MRFs”) regarding in-network pricing and out-of-network allowed amounts on a public website accessible to any person free of charge without any conditions.
The rules apply to the following:
- Health Care Plans – This can refer to a plan (including self-insured plans) of, or contributed to by, an employer (including a self-employed person) or employee organization to provide health care to employees, former employees, the employer, or other associates and their families.
- Health Care Issuer – Refers to an insurance company, service, or organization (including an HMO) that is required to be licensed to engage in the business of insurance in a State.
These rules do not apply to the following: account-based group health plans such as health reimbursement arrangements (“HRAs”), which include individual coverage HRAs, flex spending arrangements (“FSAs”), or qualified small employer HRAs, which are not group health plans and thus not subject to the requirements of section 2715 of the Public Health Service Act.
Although the rules do not specifically identify employers as being responsible, employers acting in their capacity as plan sponsors through certain health plan arrangements have obligations under the TiC rules. One of these obligations includes the public disclosure requirements discussed below.
Public Disclosure Requirement
The MRFs must be published by a group health plan or the health insurance issuer, as applicable, on its public website. The information contained in the MRFs must be updated monthly and clearly indicate the date such files were updated. Such MRFs must be provided in a nonproprietary, open format; therefore, publishing as a PDF document would not comply.
Employers under fully-insured plans may rely on the insurance issuer to comply with the public disclosure requirement because the rules mandate either the plan or the health insurance issuer to do so. Insurance issuers may have already reached out to employers to discuss who will be responsible for posting the MRFs. However, employers with self-funded or level-funded arrangements do not have the option to rely on such insurance issuers, thus, they are responsible for making such disclosures.
Regulators specifically anticipated that employers will likely rely on third parties to provide such disclosures. With this anticipation in mind, and in order to prevent unnecessary duplication, the rules provide that fully-insured plans/employers can enter into a written agreement with the health insurance issuer to provide the public disclosures on the issuer’s website. If such agreement is put in place, the fully-insured plan/employer will not be considered in violation of the rules if the issuer fails to make such disclosures.
Self-funded and level-funded plans/employers can also enter into written agreements with third parties (e.g., third-party administrators or health care clearinghouses) to provide the public disclosures on the third party’s website. However, if such agreement is put in place, the plan/employer will still be considered in violation of the rules if the third party fails to make such disclosures. Although fully-insured plans have the option to enter into such agreements with third parties as well, it is probable that fully-insured plans will take advantage of having an agreement with the health insurance issuer.
The MRFs will likely be available through a link posted on the public website of the responsible parties. Fully-insured plans relying on the insurance issuer will likely not have to take any further action, however, if the issuer fails to meet the requirements, the plan will still be responsible, absent meeting the safe harbor. For self-funded or level-funded plans, it is to be expected that such plans/employers will always have to post a link either directly to the MRF or to the third party’s website in order to comply.
What if I Don’t Have a Website?
We have received several inquiries asking how a group health plan can comply with the public disclosure requirements if it does not have its own website. Fortunately, a similar question was recently posed to the Centers for Medicare & Medicaid Services (“CMS”) who responded by stating the following:
“If a group health plan does not have a public website, the plan may satisfy the requirements for posting the Allowed Amount file and the In-Network file by entering into a written agreement under which a service provider (such as a TPA) posts the Allowed Amount file and the In-network Rate file on its public website on behalf of the plan. However, if a plan enters into an agreement under which a service provider agrees to post the Allowed Amount file and the In-network Rate file on its public website on behalf of the plan, and the service provider fails to do so, the plan violates these disclosure requirements. The Departments intend to follow up with the issuance of formal guidance soon.”
Essentially, those without a website should contract out their obligations to meet the public disclosure requirements to third parties.
Penalties and Compliance Steps
Failure to comply with TiC rules may lead to corrective actions or civil money penalties of up to $100 per day for each violation and for each individual affected by the violation. Employers, plans and issuers should have already been in discussions regarding meeting the requirements above. However, to the extent this has not occurred, it is important to take necessary steps to begin compliance. This would include the following:
- Communicate with your health insurance issuer or broker regarding these requirements and determine how each party will cooperate to comply.
- Prepare to amend contracts, or enter into contracts, with your insurer, third-party administrator, or other third parties to publicly disclose the MRFs in order to comply. This is especially critical for those employers with self-funded or level-funded plans that do not have a public website.
- Determine where you will post links to the MRFs on your public website. Even if you are relying on the health insurance issuer, it may be best practice to post a link to the issuer’s webpage where such link is located.
* The information contained in this document is provided for informational purposes only. It should not be construed as business, legal, accounting, tax, financial, investment, or other advice on any matter and should not be relied upon for such.
** Special thanks to summer associate, Tim Hutchinson, for his work on this article.