As discussed in prior compliance articles, the Transparency Rules require that non-grandfathered insured and self-insured (including level-funded) group health plans post machine readable rate and payment files on a public site no later than July 1, 2022. A machine-readable file is a digital file of information that can be imported or read into a computer system for further processing. These files should report:

1. In-network providers (INN): Publish negotiated rates for all covered items and services between the plan or issuer and in-network providers.
2. Out-of-network providers (OON): Publish the historical payments to, and billed charges from out-of-network providers (a minimum of at least 20 entries is required to protect consumer privacy).

Plans are not currently 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.

The rule is designed to allow this information to be analyzed by third parties so that vendors can provide cost comparison tools to plan participants and beneficiaries. The files will not necessarily be readable or understandable by the average plan participant.

Employers and group health plans must familiarize themselves with this disclosure requirement as insurance carriers and third-party administrators expect group health plan sponsors to assist them with posting the rate and payment files. The first set of questions below provides an overview of the requirements, and the second set provides checklists for both self-insured and insured plans.

Overview of Transparency: Rate and Payment File Rules

What plans must comply with the file posting requirements?

All non-grandfathered insured and self-insured (including level-funded plans) medical plans are required to comply with the rate and payment file posting requirements. Plans providing only Minimum Essential Coverage (“MEC”) must also comply. This requirement extends to plans sponsored by private or public entities, including plans sponsored by state and local governments, churches and tribal plans. 
Plans that are grandfathered, stand-alone dental and vision plans as well as HRAs, health FSAs and excepted benefits are exempt.

What is a “public site”?

A public site is a site (such as an employer’s external website) that can be accessed by any 
individual without the use of a log-in or password, or any other form of identifier. An intranet site 
that can only be accessed by those with access to the employer’s network or a benefits portal for 
employees are not public sites.

Where do I access the files?

Employers working with fully insured carriers will be granted access to a link that hosts the INN 
and OON rates or historical payments for the plans offered by the insurance carrier. Self-insured 
and level funded plans can access these files for INN and OON services from their Third-Party 
Administrator or Administrative Services Only provider (collectively, TPA).

What information is included in the files?

Plans are required to disclose in-network provider rates for covered items and services and outof- 
network allowed amounts and billed charges for covered items and services. The files must 
include billing codes used to identify the item or service such as the Current Procedural 
Terminology (CPT) code, Health Common Procedure Coding System (HCPCS) code, Diagnosis- 
Related Group (DRG) code or the National Drug Code (NDC) or other common identifiers.

In-Network Charges

Per recent guidance issued by the federal agencies in FAQ 53, self-insured plans and insured 
plans are required to publish in-network services, all applicable rates in dollar amounts, to the 
extent available, which may include one or more of the following:

• Negotiated rates,
• Underlying fee schedule rates, or
• Derived amounts for all covered items and services: if the alternative payment methodology does not fall within the specified schema, or if additional information is required to describe the payment parameters, the plan may include a description of the formula, variables, methodology, or other information necessary to understand the arrangement

For alternate payment modalities such as referenced-based pricing, bundled payments, or 
capitation fees, the plan should also include the underlying fee schedule rates, if available, in 
addition to the negotiated rates or derived amounts. 
However, 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.

Out-of-network charges 
For out-of-network charges or services, the 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.

Checklists 
What should I do as a sponsor of a self-insured or level-funded medical plan? 
As the sponsor of a self-insured or level-funded plan, plan sponsors should consider the following:

• Determine if the TPA will be preparing and making available machine-readable files that conform with the schema issued by the DOL/CMS.
• Identify if the plan provides alternative payment methodologies to determine if special description of formulas or percentages will be required for certain procedures or services
• Confirm the date the TPA will be making available the machine-readable files for INN and ONN services.
• Identify whether the employer/plan sponsor or TPA will be posting the machine-readable files on a public site. Most large TPAs will require that the sponsor of the self-insured medical plan post the files on their public website.
• If the employer is required to post the files, they need to be made public no later than July 1, 2022.
• If the TPA will be posting the files to its site, an additional link needs to be added to the employer’s public site no later than July 1, 2022.
• Review any contracts (if any) provided by the TPA regarding the cost and requirements for providing these services.

What should I do as a sponsor of a fully insured medical plan?

Plan sponsors of fully insured medical plans should proceed as follows:

• Determine if the insurance carrier will be hosting on their public site the machine-readable files or expects the plan sponsor/employer to post the files on their own public site.
• Determine the date the files will be made available by the insurance carrier
• Identify the plan or plans sponsored by the plan sponsor/employer and retrieve the links to the files for INN and ONN services for each plan (to the extent the files are posted on the insurance carrier’s site).
• Post the files on the employer/plan sponsor’s public website (if the carrier will be delegating this task to the employer/plan sponsor) no later than July 1, 2022.
• If the carrier is not delegating this task to the employer/plan sponsor, consider posting a link to the insurance carrier’s website on the employer’s public site no later than July 1, 2022. (This may not be required if your contract with the carrier states that the carrier is fully responsible for the posting of the files.)

Conclusion

As we fast approach the July 1, 2022 deadline to post machine-readable rate and payment files, it is important for sponsors of insured and self-insured medical plans 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 files. 
If you have any questions regarding the position taken by your medical insurance carrier or TPA, please contact your HUB representative.

DISCLAIMER

Neither 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. Last Updated 05/23/2022

FAQS ABOUT AFFORDABLE CARE ACT IMPLEMENTATION PART 53

April 19, 2022 
Set out below are Frequently Asked Questions (FAQs) regarding implementation of certain provisions of the Affordable Care Act (ACA). These FAQs have been prepared jointly by the Departments of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Departments). Like previously issued FAQs (available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs and http://www.cms.gov/cciio/resources/fact-sheets-and-faqs/index.html), these FAQs answer questions from stakeholders to help people understand the law and promote compliance.

Transparency in Coverage Machine-Readable Files

The Transparency in Coverage Final Rules (the TiC Final Rules) require non-grandfathered group health plans and health insurance issuers offering non-grandfathered coverage in the group and individual markets to disclose, on a public website, information regarding in-network rates for covered items and services, out-of-network allowed amounts and billed charges for covered items and services, and negotiated rates and historical net prices for covered prescription drugs in three separate machine-readable files.1 The machine-readable file requirements of the TiC Final Rules are applicable for plan years (in the individual market, policy years) beginning on or after January 1, 2022. The Departments previously announced that they will defer enforcement of the requirements related to machine-readable files disclosing in-network and out-of-network data until July 1, 2022.2 The Departments also previously announced that they will defer enforcement of the requirement that plans and issuers publish a machine-readable file related to prescription drugs while they consider, through notice-and-comment rulemaking, whether this requirement remains appropriate.3

The TiC Final Rules require plans and issuers to publish all applicable rates, which may include one or more of the following: negotiated rates, underlying fee schedule rates, or derived amounts for all covered items and services in the In-network Rate File. The Departments specify in the preamble to the TiC Final Rules that the In-network Rate File requirement applies to plans and issuers regardless of the type of payment model or models under which they provide coverage.4 If the plan or issuer does not use negotiated rates for reimbursement of items and services, the plan or issuer must report derived amounts, to the extent those amounts already are calculated in the normal course of business. The TiC Final Rules do not require plans or issuers to develop a new methodology for providing derived amounts. If the plan or issuer uses underlying fee schedule rates for calculating cost sharing, the plan or issuer should include the underlying fee schedule rates in addition to the negotiated rates or derived amounts.

Notably, the TiC Final Rules require that these rates be reflected in the In-network Rate File as dollar amounts. While there are many alternative reimbursement arrangements that do not have a dollar amount associated with particular items and services before the item or service is provided or rendered, a dollar amount can still be determined in some instances under these models. Accordingly, in the preamble to the TiC Final Rules, the Departments provide a list of alternative reimbursement arrangements and summarize general reporting expectations for these models, while acknowledging that this list is not exhaustive, as there may be other alternative 
reimbursement or contracting arrangements in use.5 Specifically, the Departments summarize the general reporting expectations for several alternative reimbursement arrangements, including bundled payment arrangements and capitation arrangements (including sole capitation arrangements and partial capitation arrangements), reference-based pricing without a defined network, reference-based pricing with a defined network, and value-based purchasing. For example, the preamble clarifies that for payment arrangements under which adjustments are made after care is provided, the plan or issuer should disclose the base negotiated rate before 
adjustments are applied.6 

After the TiC Final Rules were issued, stakeholders have utilized GitHub and other forums to raise to the Departments’ attention alternative reimbursement arrangements for which reporting a current and accurate dollar amount for items and services in the In-network Rate File before the item or service is provided or rendered may not be possible. Specifically, stakeholders have asked the Departments how to report dollar amounts for negotiated rates that result from certain “percentage-of-billed charges” contract arrangements, under which a dollar amount can be determined only retrospectively because the agreement between the plan or issuer and the innetwork provider states that the plan or issuer will pay a fixed percentage of the billed charges. It is the Departments’ understanding that these types of arrangements are not uncommon for 
certain types of items or services (such as low-volume procedures or high-cost, outlier inpatient care) and that plans and issuers may enter into these arrangements, in part, because the arrangements include limitations on a provider’s ability to charge amounts for furnished items and services that significantly vary from an established rate schedule (such as a hospital’s chargemaster)—though the rates reflected in such a schedule may not necessarily be the amounts charged. Thus, plans and issuers may be able to estimate the potential range of rates in advance, but they cannot determine accurate dollar amounts until a claim is made.

To address these situations, the Departments are providing an enforcement safe harbor for satisfying the reporting requirements for plans and issuers that use alternative reimbursement arrangements that do not permit the plans and issuers to derive with accuracy specific dollar amounts contracted for covered items and services in advance of the provision of that item or service, or that otherwise cannot disclose specific dollar amounts according to the schema as provided in the Departments’ technical implementation guidance through GitHub. This safe harbor is further described in Q1 and Q2 of these FAQs Part 53.

The Departments will monitor the implementation of the machine-readable files requirements and may revisit this safe harbor in the future, including when access to underlying fee schedules becomes more widely available in connection with the development of pathways for providers to transmit expected charges to plans and issuers in support of the development of advanced explanations of benefits as required under Internal Revenue Code section 9816(f), the Employee3

Retirement Income Security Act section 716(f), and the Public Health Service Act section 2799A-1(f), as added by Section 111 of title I (the No Surprises Act) of division BB of the Consolidated Appropriations Act, 2021.7 HHS encourages states that are primary enforcers of this requirement with regard to issuers to take a similar enforcement approach and will not regard a state as failing to substantially enforce this requirement if it takes such an approach.

This safe harbor will not apply to a particular alternative reimbursement arrangement if the Departments determine that the particular arrangement can sufficiently disclose a dollar amount. The Departments encourage the continued utilization of GitHub to submit suggestions on ways the schema should support alternative reimbursement arrangements.

Q1: In the In-network Rate File, how can plans and issuers report applicable rates for specific items or services provided under “percentage-of-billed-charges” contracts if an exact dollar amount cannot be determined for those items or services prospectively? 
For contractual arrangements under which a plan or issuer 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 and issuers may 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 percent of billed charges, and the plan or issuer is unable to ascertain the dollar amount that will be billed for the item or service in advance, the Departments will permit the plan or issuer to report the in-network rate using the applicable percentage of 70. 
Documentation specific to the format requirements for percentage-of-billed-charges arrangements can be found here: https://github.com/CMSgov/price-transparency-guide/tree/master/schemas/in-network-rates#negotiated-price-object.

Q2: In the In-network Rate File, how can plans and issuers report applicable in-network rates for items and services provided under alternative reimbursement arrangements that are not supported by the schema or require additional context to be understood? 
In situations in which alternative reimbursement arrangements are not supported by the schema, or in instances where the contractual arrangement requires the submission of additional information to describe the nature of the negotiated rate, plans and issuers may disclose in an open text field a description of the formula, variables, methodology, or other information necessary to understand the arrangement. The open text field may be utilized for reporting only if the schema—as provided in the Departments’ technical implementation guidance through GitHub—does not otherwise support the arrangement. 
Documentation specific to use of the open text field can be found here: https://github.com/CMSgov/price-transparency-guide/tree/master/schemas/in-network-rates#negotiated-price-object.

1 26 CFR 54.9815-2715A3; 29 CFR 2590.715-2715A3; and 45 CFR 147.212; 85 FR 72158 (Nov. 12, 2020).

2 See FAQs about Affordable Care Act and Consolidated Appropriations Act, 2021 Implementation Part 49, Q 2, available at: https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-49.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-49.pdf.

3 See id. at Q 1.

5 Id. at 72158, 72226.

6 Id. at 72228.

7 Pub. L. No. 116-260 (2020).