What is the Transparency in Coverage rule?
The Transparency in Coverage final rule (TiC) sets requirements for all group health plans and insurance carriers to disclose cost-sharing information on request to members, beneficiaries, enrollees, and/or their authorized representatives.
The rule also requires issuers to make this information available online and in paper format so that requesters can estimate out-of-pocket expenses and shop for items and services if they desire.
TiC requires plans to disclose their in-network negotiated rates, out-of-network allowed charges, drug pricing information, and other information in a machine-readable format (MRF). This lets the public access health coverage information and helps them understand the insurance pricing, potentially slowing the rise in health care spending.
Finally, TiC amends program rules regarding medical loss ratio (MLR), allowing issuers who offer group or individual coverage to receive credit for enrollees doing their own shopping for lower-cost, higher-value healthcare providers.
Transparency in Coverage Machine Readable Files (MRFs)
Transparency in Coverage requirements primarily involves making online pricing guides and codes available in machine-readable formats. The Departments of Labor, Treasury, and Health and Human Services (collectively, the Departments) have oversight of TiC. Accordingly, they have set these minimum guidelines for what must be available in an online readable format.
Required data elements
- Name of Reporting Entity. The reader must be able to easily identify who placed this information online.
- Type of Entity. The specific nature of the entity, such as group health plan, insurance agency, or third-party clearing house.
- Date of Last File Update. One requirement is that the most recent copy be provided as it becomes available.
- Plan or Coverage Name. Multiple plans under a plan sponsor or company must have separate filings (i.e., Superior Health Plan: Alpha, Superior Health Plan: Beta).
- Plan Identifier/Type of Plan Identifier. The Employer Identification Number (EIN) or Health Insurance Oversight System Identification Number (HIOS ID), as applicable.
- Type of Plan Market. Such as individual or group market coverage.
- Type of Product Network. HMO, PPO, POS, etc., through which the package is offered.
- Network Name. The name of the network offering the insurance package.
- Identification of Providers. The legal name of the person or entity associated with the National Provider Identifier (NPI), and the NPI number, the 10-digit number issued to the provider by the CMS.
- Provider ZIP Code. Including the ZIP+4. A complete record of each of the data elements must be reported for each separate location of a provider, meaning if a provider has ten ZIP codes, there must be ten complete and separate records.
- Unique Out-of-Network Allowed Amounts. This will be discussed more fully below. The unique allowed amount that the plan or issuer paid for a covered item during the 90 days before the publication date of the MRF.
- NPI Associated with Allowed Amount. The provider associated with each covered item is included in the MRF. There may be multiple NPIs.
- Billing Code. The name or type of code used to identify the health care items or services in billing, invoicing, adjudicating, and paying claims for a covered item or service.
- Type of Billing Code. Current Procedural Terminology (CPT); Healthcare Common Procedure Coding (HCPCS); Diagnosis Related Group (DRG); National Drug Code (NDC), or other common payer identifiers.
- Billing Code Type Version. A version of billing code type. (i.e., Medicare is currently using International Classification of Diseases version 10 [ICD-10])
- Bundle Indicator. Indicate whether the code applies to a single item, service, or bundled payment arrangement.
- Covered Items and Services. The name of each item or service for which the costs are payable in whole or part under the terms of coverage.
The out-of-network amount is one of the primary reasons the TiC was created. Therefore, the MRF must show each unique allowed out-of-network amount paid for a covered item or service during a specified 90-day period that begins 180 days before the publication date of the MRF. The Department's website provides a complete explanation of this line item.
Transparency in Coverage machine-readable formats are those which can be imported into a computer system for processing. Standard formats currently include XML, JSON, and CSV formats.
TiC requires health insurance plans and carriers to provide the information in at least three different formats, and these are the most common. Nearly all home computers can download and open one of these file types.
The Departments have specified that proprietary file types like Excel, Word, and Adobe PDF are not acceptable. Excel and Adobe can translate XML and CSV formats.
The TiC requirements state that MRFs must be updated “monthly” but do not specify updates must be done per calendar month. The Departments consider “monthly” to mean any period of roughly 30 days.
Consumer Price Transparency Tool from Health Plans
To make it easier for consumers and insurers to be sure their MRFs comply with TiC requirements, CMS developed a schema validator tool to validate all files in the .json schema for attributes and syntax errors. However, this tool cannot test for data accuracy and cannot yet validate .xml or .csv formatted files. Therefore, CMS has made the validator available on GitHub with instructions for installation and programming.
Transparency in Coverage Deadlines and Phases
The Transparency in Coverage rule is being implemented in three phases. Although Phase 1 has been partially delayed giving providers and insurers more time to comply with the regulations for adopting uniform coding systems, the overall plan has not changed.
In Phase 1, health plans must post MRFs for in-network rates, out-of-network allowed amounts and billed charges, prescription drug negotiated rates, and historical prices. Phase 1 applies to plan years beginning January 1, 2022
Phase 2 is scheduled to begin on January 1, 2023. Health plans must provide an internet service tool that supplies relevant costs for 500 specified costs and services. The tool must allow searching by billing codes, descriptive terms, in-network providers, geography, and cost-sharing responsibility.
Beginning January 1, 2024, the requirements of Phase 2 shall apply to all items and services.
Penalties for noncompliance with TiC
CMS has been tasked with enforcing and educating issuers and providers on the requirements of TiC. Currently, an enforcement “safe harbor” is being provided for providers who cannot specify exact dollar amounts for items or services as required by TiC until after they are provided.
Enforcement actions can include:
· Requiring corrective actions
· Imposing a monetary penalty of up to $100 per day per violation
· Additional penalties as warranted
How some plans have complied with TiC
Some larger health providers have already started releasing their MRF files under TiC requirements. These are literally data dumps, and their effectiveness in creating “transparency” is limited without understanding how to extract relevant data from the mass of information. More on that is below.
Aetna Transparency in Coverage
Aetna provided this statement regarding their compliance with TiC:
The Transparency in Coverage rule requires health plans and insurers to disclose pricing information via MRF by July 1, 2022. Health plans must generate two MRFs that contain
1. Negotiated rates for in-network providers
2. Billed charges and allowed amounts paid for out-of-network providers
We’ll publish this information on Aetna.com on July 1, 2022, for fully insured (51-100) and small group Aetna Funding AdvantageSM (2-100) groups.
By posting the MRFs for small group Aetna Funding Advantage clients, we’re taking work off their plate. Aetna will update the files each month and this link will remain active with the most up-to-date information.
Kaiser Transparency in Coverage
Kaiser Permanente provided this statement regarding their compliance with TiC:
Kaiser Permanente is committed to providing price transparency in our interactions with customers and members. We already provide multiple price transparency tools for:
- Brokers, consultants, and employers — Client and group-specific reports are available based on claims data, clinical data, employee engagement, and aggregate data. To be HIPAA compliant, there are group size requirements that vary depending on the report. Reach out to your account representative to learn more about the tools that are available to you.
- Members — The machine-readable files are not intended to represent member out-of-pocket costs. Each member's cost share is based on their unique plan benefits. The best way for Kaiser Permanente members to estimate their out-of-pocket health care costs before getting care from Kaiser Permanente providers is to use the cost estimator tool on kp.org (requires sign-on).
The links on this page are to machine-readable files (MRFs) that comply with the federal Transparency in Coverage rule. The files will be made public for plan years that begin on or after January 1, 2022, and will be refreshed monthly.
Kaiser's MRFs are only available for the following regions:
- Maryland/Virginia/Washington D.C.
UHC Transparency in Coverage
United HealthCare released this statement:
UnitedHealth Group has long supported actionable price and quality transparency for consumers and currently offers transparency tools to a significant portion of our business. Compliance with the laws and regulations applicable to our business is a fundamental commitment of UnitedHealth Group, and we intend to comply with the requirements of the new rules.
Transparency in Coverage FAQs
Who enforces TiC?
CMS is responsible for enforcing compliance with TiC requirements. However, because of the complexities involved in coding and making the volume of data available, the Departments have provided a “safe harbor” for enforcement in situations where plans and issuers cannot give a specific dollar amount for items and services according to the schema. This will avoid enforcement penalties where issuers are making a good-faith effort to comply but cannot do so because of uncertainties in their billing systems.
The safe harbor system allows issuers and plans to either estimate costs at an estimated percentage of coverage or use an open text field to describe the methodology used to ascertain coverage.
What health plans are excluded from following TiC?
Health plans in place before March 23, 2010, may be excluded from compliance with TiC, provided they maintain their status under the rules. The intent of the TiC did not apply to these plans, so its enactment would not have affected them.
Short-term limited-duration insurance (STLDI) is excluded from TiC since it is not covered under the definition of “individual health insurance coverage.” In addition, health reimbursement plans that simply provide a fixed rate or lump sum for a period are also excluded for the same reason.
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for voluntary health plans. Even before TiC was enacted, ERISA required plans to provide members with information about features and funding, including plan assets.
ERISA was included in the Affordable Care Act and is considered a type of private health insurance plan. As such, ERISA-based insurance plans are subject to TiC requirements in the same way that private insurers are. The Department of Labor has enforcement oversight of ERISA plans.
Insured Health Plans
A fully-insured health plan is a group health plan purchased by an employer to provide coverage for their employees. The employer and employees pay the premiums to the insurer and the insurance company administers the medical claims.
Under TiC, self-insured employers may have some responsibility to comply with portions of TiC, whereas fully-insured employers do not. To avoid duplication of records, fully-insured health plans are not required to contribute to MRFs for transparency purposes.
What is a grandfathered plan?
A grandfathered plan was in place before the Transparency in Coverage rule went into effect on March 10, 2010, and has continuously maintained that status. Such a plan may not provide certain protections guaranteed by the Affordable Care Act (ACA). It must include a statement that it believes it is a grandfathered plan according to the Patient Protection and Affordable Care Act.
What is a Transitional Relief Plan?
Transitional Relief plans, also known as “grandmothered” plans, are small group plans in place before March 10, 2010, which are not ACA compliant and do not qualify for exemption under TiC.
CMS had suspended enforcement for these “grandmothered” plans, allowing them an additional year to comply with ACA and TiC, but that suspension will end as of 2022 unless another extension is issued. As of this date, no new extension has been granted, and all “grandmothered” plans must be compliant by January 1, 2023.
What about tribal plans?
At this time, subject to challenges from sovereign immunity and other laws, tribal plans organized under ERISA or PHSA still must comply with TiC. At least one nation, the Stockbridge-Munsee Band of the Mohican Nation, has already made its information available.
Do dental and vision need to be included in MRFs?
Stand-alone dental and vision plans are excluded from TiC and do not need to comply with its regulations. However, dental and vision plans which are part of a group health insurance plan will need to be part of the MRF.
Currently, the 500-item list of required costs and services does not include a comprehensive list of dental and vision services; but providers and insurers should prepare for these to be added in the next phase of TiC.
Will pharmacy prices be included in MRFs?
CMS has delayed the enforcement of pharmacy MRFs until January 1, 2024. As a result, providers have another year to list medication prices in their MRFs. Insurers and providers are working with their companies to produce these huge data files in the required formats.
Why TiC is a huge win for transparency in healthcare
TiC may be a win for those seeking healthcare transparency, but users must know how to access it. According to data miner Alec Stein at DoltHub, more than one trillion prices were deposited on the internet on the first date it was required, July 1, 2022.
It’s hard to describe how much data “one trillion prices' ' really are. Doltub offers some comparisons. The MRFs provided by the insurance companies are available in compressed format, meaning they are loaded so that downloading them can be done quickly. Your computer is the one that takes the time to unpack the file and assemble what is in it.
A Quick Computer Terminology Lesson
A “byte” of data contains two “bits,” two binary digits that make up a piece of data in a computer. When IT professionals talk about megabytes (MB) worth of data, they mean one million of those two-bit pieces of information. For example, an off-the-shelf laptop has a 500 MB hard drive, so it can store about 500 million bytes of data.
A gigabyte (GB) is 1,000 MB. Gaming and graphics computers have memories in gigabytes because they need extra processing capacity (pictures and videos take up more space than words). A terabyte (TB) is 1,000 GB. It is estimated that 10 terabytes would hold the Library of Congress.
Uncompressing the MRFs
On July 1, 2022, Aetna, Humana, Anthem, United Healthcare, and others made their compressed MRFs available online. The amount of data associated with this dump was staggering. According to DoltHub, the total compressed data from all sources runs to about 100 TB–more than the Library of Congress and nearly as much as the entire Netflix catalog. A rough estimate of the uncompressed files would be tens of petabytes (1,000 terabytes).
Humana’s uncompressed files alone run to more than 600 TB of data. Why are these files so big? It turns out that the providers did not publish only their base prices with hospitals. Instead, as DoltHub found, they included the negotiated rates from every insurance company with which the insurer has any type of contract.
For instance, a grocery supplier who contracts to provide applesauce cups has a negotiated rate through the insurer, so that has its own code, its own billing cycle, and so on. The same supplier has different rates and codes for its Jello cups.
And, as DoltHub points out because the files must be revised monthly, every 30 days, there will be a new 100 TB data dump.
How to Make Data Dumps Work
Too much of a good thing can be almost as bad as not enough of one. Transparency in coverage was needed because neither employers, consumers, nor possibly even hospitals knew how much insurers had agreed to pay suppliers for health care under their agreements. Theoretically, with the new rules in place, employers and consumers can now use available data to find better prices–if they can find it.
The trick will be finding prices in a sea of data. DoltHub estimates it would take weeks or months to scrape the data dumps for useful information, assuming one had a fiber-optic connection that could handle a 400Mbps download and unpack 90GB of compressed files. And of course, know what it is you’re looking for in a file 60 times the size of the Library of Congress.
DoltHub has a tool for splitting very large JSON files into many smaller .jsonl files. This Open Source file breaks down massive compressed files into smaller chunks for easier handling. This saves businesses and consumers who lack high-speed computers from waiting days for huge compressed files to download and open on their home computers.
Before wading through seas of data, searchers should refine their search parameters. The purpose of transparency was to make finding prices and costs of services and items easier, so narrow your search by those items. The MRFs must be searchable according to TiC protocols, so take advantage of that.
- Search by NPI. Look for national provider identifiers to locate specific hospitals or caregivers.
- Search by CMS code. Review the 500 CMS codes required for the MRFs, and isolate the specific codes you need.
- Use a representative search. Costs and prices will not vary much from provider to provider. You don’t need to look at every provider or transaction to obtain a figure.
Finally, keep up with data miners and other interested parties like DoltHub. They will be at the forefront of finding ways to manage the huge amounts of data available.
CMS will continue to guide how and where to access new data as it is provided.