On October 29, 2020 the United States Departments of Health and Human Services, Labor and Treasury (the Departments) issued a final rule entitled Transparency in Coverage (the Rule). The Rule continues on the Trump Administration's goal of increasing the availability and transparency of health care price information to consumers and others. It follows on the President's Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First, issued June 24, 2019, and the Hospital Price Transparency final rule, issued November 15, 2019. The Hospital Price Transparency rule requires hospitals to make public a variety of pricing information and is to become effective on January 1, 2021.

The Rule places requirements on health insurance issuers and group health plans. Its two basic requirements are (1) to require such insurers and plans to make disclosures specific to participants, beneficiaries and enrollees (referred to herein collectively as participants) upon request of the participant and (2) to require such plans and insurers to make public disclosures in machine-readable files of a variety of information about in-network, out-of-network, and pharmaceutical prices.

A.  Required Disclosures to Participants, Upon Request 

Under the Rule, upon the request of a participant in a group health plan or health insurance issuer offering group or individual insurance, the plan or insurer must provide to the participant the following information:

1. An estimate of the participant's cost-sharing liability (the expenditure required to be made by the participant such as deductibles, coinsurance and copayments) for a requested item or service furnished by a provider or providers and covered under the terms of the plan or insurance.

2. Accumulated amounts, meaning the amount the participant has previously incurred toward a deductible or out-of-pocket limit at the time of the request.

3. The in-network rate with a contracted in-network provider applicable to the plan or insurer's payment model, comprised of the following elements:

• The negotiated rate with the in-network provider for the requested covered item(s) or service(s) (even if the rate is not used to determine the cost-sharing liability), and

• The underlying fee schedule rate for the requested item(s) or service(s) if different than such negotiated rate.

4. The out-of-network allowed amount or any other rate that provides a more accurate estimate of the amount the plan or insurer will pay for the item(s) or service(s) if the provider is an out-of-network (non-contracted) provider.

5. If the item or service requested is part of a bundled payment, a list of items or services included in the bundle for which cost-sharing information is provided.

6. Notification of any prerequisite toward coverage for the item or information.

7. A notice that in plain language includes: an out-of-network provider may bill the participant (if balanced billing is permitted) and that the cost-sharing information does not include such amounts; a statement that actual charges may vary from the estimates provided; a statement that the cost-sharing liability estimate is not a guarantee that the items or services will be provided; whether the plan counts copayment assistance or other third-party payments in the statement of cost-sharing liability or an out-of-pocket maximum; a statement that preventive items may not be subject to cost-sharing liability; and other disclosures deemed appropriate.

The foregoing information must be made available in plain language, without fee, through a self-service tool or internet website that is accurate at the time of request. The self-service tool must allow users to search for cost-sharing information by billing code, name of in-network provider and other factors that affect cost-sharing liability; and to search for an out-of-network allowed amount by billing code and other factors. It must include other specified information. The plan or issuer may also provide the required disclosures by paper form for no fewer than 20 providers per request. The paper form must be mailed to the participant within two (2) business days after receipt of the request. If the participant agrees, the disclosures can be made by phone or email.

The Rule specifically permits a plan or insurer to contract with a third party, such as a PBM or TPA, to provide the information required.

The Rule's requirements concerning participant disclosure, in contrast to those concerning public disclosure discussed below, apply to plan or policy years beginning on or after January 1, 2023 with respect to 500 items and services to be posed in a publicly available website, and with respect to all covered items and services for plan and policy years beginning on or after January 1, 2024.

The requirements of the Rule do not apply to "grandfathered plans" under the Affordable Care Act (those in existence as of March 23, 2010, which maintained such status under the applicable rule).

B.  Requirements for Public Disclosure

The Rule also contains requirements for public disclosure of certain information on an internet website in three (3) machine-readable files. The three (3) machine-readable files are an in-network rate file, an out-of-network allowed amount file, and a prescription drug machine-readable file. The requirements of each file are as follows:

1. In-Network Machine Readable File must include:

1. For each coverage option offered by a plan or insurer the name and 14-digit HIOS identifier (if one is available), the 5-digit HIOS identifier (if the 14-digit is not available), and the EIN if no HIOS identifier is available.

2. A billing code (the code used by the plan or insurer to identify items or services for purposes of billing, such as a CPT Code, HCPCS code, DRG, or NDC) and a plain language description for each billing code for each covered item or service.

3. All applicable rates, which may include one or more of: negotiated rates, underlying fee schedule rates (the rate from an in-network provider to determine cost-sharing liability), or derived amounts (the price assigned to an item or service for purpose of internal accounting, reconciliation with providers or submission of data). For items or services in a bundled payment, the applicable rate is to be a dollar amount for each covered item or service and other specified information.

2. Out-of-Network Allowed Amount Machine Readable File must include:

1. For each coverage option offered by a plan or insurer the name and 14-digit HIOS identifier (if one is available), the 5-digit HIOS identifier (if the 14-digit is not available), and the EIN if no HIOS identifier is available.

2. A billing code (the code used by the plan or insurer to identify items or services for purposes of billing, such as a CPT Code, HCPCS code, DRG or NDC) and a plain language description for each billing code for each covered item or service.

3. Unique out-of-network allowed amounts and billed charges with respect to covered items or services of out-of-network providers during the 90-day period that begins 180 days prior to the publication date of the file (but the plan or insurer must omit such data in relation to a particular item or service and provider if out-of-network allowed amounts in connection with fewer than 20 different claims under a single plan or coverage).

   The unique out-of-network allowed amount must be stated as a dollar amount with respect to the covered item or service furnished by an out-of-network provider, and associated with the NPI, TIN or Plan of Service Code for each out-of-network provider.

3. Prescription Drug Machine-Readable File must include:

1. For each coverage option offered by a plan or insurer the name and 14-digit HIOS identifier (if one is available), the 5-digit HIOS identifier (if the 14-digit is not available), and the EIN if no HIOS identifier is available.

2. The NDC and the proprietary and non-proprietary name assigned to the NDC by the FDA for each prescription drug under a coverage option.

3. The negotiated rates, which must be:

• Reflected as a dollar amount with respect to each NDC that is furnished to an in-network provider or other prescription drug dispenser;

• Associated with the NPI, TIN and Plan of Service Code for each in-network provider;

• Associated with the last date of the contract term for each provider-specific negotiated rate that applies to each NDC; and

• Historical net prices (the retrospective average amount a plan or insurer paid for a prescription drug (inclusive of discounts, rebates, etc.) associated with the 90-day time period beginning 180 days prior to publication of the file for each provider specific historical net price).

The machine-readable files must be in a form and format as specified by the Departments and they must be publicly available and accessible, free or charge and without conditions (e.g., passwords, etc.). The plan and insurer must update the files on a monthly basis.

The plan or insurer may satisfy the requirements for public disclosure by contracting with a third party such as a TPA or claims clearinghouse.

The public disclosure requirements, in contrast to the requirements for participant specific information discussed above, apply for plan or policy years beginning on or after January 1, 2022.