The Requirement to Post Machine-Readable Files Begins July 1, 2022

The Transparency in Coverage Final Rules (TiC Final Rules) requires group health plans and health insurance issuers to disclose on a public website detailed pricing information in three separate machine-readable files (MRFs). Specifically, the following information must be disclosed:

• First file: In-network provider negotiated rates for covered items and services (the “In-network Rate File”);
• Second file: Historical payments to and billed charges from out-of-network providers (the “Allowed Amount File”); and
• Third file: In-network negotiated rates and historical net prices for covered prescription drugs (the “Prescription Drug File”)—this particular MRF requirement is delayed until further notic

  The files must be publicly available and accessible free of charge without any restrictions.

Action Steps

Most employers will rely on their insurance carriers and third-party administrators (TPAs) to provide the MRFs. The TiC Final Rules allow fully-insured employers to shift legal responsibility for the MRFs to their carriers if this arrangement is described in a written agreement. Self-insured employers can use their TPAs (or other service providers) for the MRFs if this is set forth in a written agreement. Still, these employers remain legally liable for compliance under the TiC Final Rules.

The TiC Final Rules suggest that self-insured employers may be required to post a link on their websites to where the MRFs are publicly available, but this is not clearly addressed in the Final Rules. Additional guidance from federal agencies on this topic would be helpful.

Employers should confirm that written agreements addressing MRFs are in place with their carriers, and TPAs and that these files will be available by the applicable deadline.

What is Machine-readable Files (MRFs)?

The TiC Final Rules define ‘‘machine-readable file’’ as a digital representation of data or information in a file that can be imported or read by a computer system for further processing without human intervention, while ensuring no lost semantic meaning. This ensures the MRF can be imported or read by a computer system without those processes resulting in alterations to the ways data and commands are presented in the file.

The Final Rules require each MRF to use a nonproprietary, open format that will be identified in technical implementation guidance—for example, JavaScript Object Notation (JSON), Extensible Markup Language (XML) or Comma Separate Value(s) (CSV). A PDF file would not meet this definition due to its proprietary nature.

Three Required Content Elements for All MRFs

• Name and identifier for each coverage option: Plans and issuers must include their Health Insurance Oversight System (HIOS) ID at the 14-digit product level. If the plan or issuer does not have a HIOS ID at the plan or product level, the plan or issuer must use the HIOS ID at the five-digit issuer level. If a plan or issuer does not have a HIOS ID, it must use its EIN.
• Billing codes: This includes a Current Procedural Terminology (CPT) code, a Healthcare Common Procedure Coding System (HCPCS) code, a Diagnosis Related Group (DRG), a National Drug Code (NDC) or another common payer identifier used by a plan or issuer (for example, a hospital revenue code). In the case of prescription drugs, plans may only use the NDC as the billing code type. Plain language descriptions of the billing codes must also be provided.
• In-network applicable amounts, out-of-network allowed amounts, or negotiated rates and historical net prices for prescription drugs: This will depend on the type of file (in-network amounts for the In-Network Rate File, allowed amounts and historical billed charges for the Allowed Amount File, or negotiated rates and historical net prices for the Prescription Drug File). For all MRFs, the specific pricing information within each file must be associated with the provider’s national provider identifier, tax identification number and a Place of Service Code, although the provider’s name is not required to be included. Historical payments must have a minimum of 20 entries to protect consumer privacy.

What to Do Next?

Carriers, TPAs, and other third parties have been preparing for the July 1 deadline for months. Many have offered various solutions up to and including building out a public website on behalf of a plan. Contact us today to get started.

Fully insured plan sponsors should take steps (if they have not already done so) to obligate the carrier in writing to handle TiC rules compliance to guard against liability for compliance failures. Further, employers will want a clear picture of where the MRFs will live and how they can direct participants to them.

Similarly, self-funded plan sponsors will want to enter into a written contract that requires their TPA to provide all required information and indemnify the sponsor for any shortcomings. Sponsors will want to know exactly where the data will be stored and that it will be maintained as required by the TiC rules.

The Departments have not provided specific guidance beyond what is noted above. However, particularly in cases where a carrier or other third party has contractually agreed to perform all public disclosures, plan sponsors should, at a minimum, provide a link to where the third party houses the required disclosures. This will require coordinating with a plan sponsor’s IT team to coordinate how and where to best post such a link.

Finally, plan sponsors should consider clearly communicating to employees where they can access the required disclosures and learn more about their plan costs. The TiC rules do not require such communication but giving affected individuals this information should reduce the number of questions busy HR professionals will have to answer regarding this subject.