Key Takeaways
- The Transparency in Coverage (TiC) rule requires self-funded health plans to publicly post machine-readable files (MRFs) containing in-network rates, out-of-network allowed amounts, and prescription drug pricing.
- The CAA's No Surprises Act adds balance billing protections, good faith cost estimates, and an independent dispute resolution (IDR) process for out-of-network claims.
- Self-funded plan sponsors can delegate TiC MRF production to their TPA — but the plan sponsor remains legally responsible for compliance.
- The price comparison tool requirement — allowing members to get personalized cost estimates for 500+ items and services — is now in effect.
- Non-compliance with TiC and No Surprises Act requirements can result in excise taxes of $100 per day per affected individual.
What the Transparency in Coverage Rule Requires
The Transparency in Coverage final rule, issued in 2020 and phased in through 2022 and 2023, imposes three major requirements on group health plans:
- Machine-Readable Files (MRFs): Plans must publicly post three MRFs — in-network rates, out-of-network allowed amounts and billed charges, and prescription drug pricing. These files must be updated monthly and posted on a publicly accessible website.
- Price Comparison Tool: Plans must provide members with an online tool to get personalized cost estimates for covered items and services. The tool must cover at least 500 specified items and services.
- Explanation of Benefits (EOB) Enhancements: Plans must provide advanced EOBs with cost-sharing information before services are rendered — though this requirement has been delayed pending further rulemaking.
The MRF requirement is the most operationally significant for self-funded plan sponsors. The files are large — in-network rate files for major carriers can exceed 100 gigabytes — and must be updated monthly. Most self-funded employers delegate MRF production to their TPA, but the plan sponsor remains legally responsible for ensuring the files are posted and current.
Machine-Readable Files: What Must Be Posted
The three required MRFs must be posted on a publicly accessible website — no login required. The files must be in JSON or CSV format and comply with the CMS technical specifications.
| File | Content | Update Frequency |
|---|---|---|
| In-Network Rate File | Negotiated rates for all covered items and services with in-network providers | Monthly |
| Out-of-Network Allowed Amount File | Allowed amounts and billed charges for out-of-network claims | Monthly |
| Prescription Drug File | Negotiated rates and historical net prices for covered drugs | Monthly (enforcement delayed) |
Most TPAs and carriers will produce and host MRFs on behalf of self-funded plan sponsors. Confirm with your TPA that they are producing compliant MRFs for your plan and that the files are posted on a publicly accessible URL. Request the URL and verify the files are current — do not assume compliance without verification.
The No Surprises Act
The No Surprises Act, effective January 1, 2022, protects patients from unexpected out-of-network bills in specific circumstances. It applies to emergency services, non-emergency services at in-network facilities from out-of-network providers, and air ambulance services.
- Balance billing prohibition: Out-of-network providers cannot bill patients more than their in-network cost-sharing for covered emergency services and certain non-emergency services at in-network facilities.
- Good Faith Cost Estimates: Providers must give uninsured and self-pay patients a good faith cost estimate before scheduled services. For insured patients, the plan must provide an Advanced EOB upon request.
- Independent Dispute Resolution (IDR): When a plan and an out-of-network provider cannot agree on payment, either party can initiate the federal IDR process. An independent arbitrator selects between the plan's offer and the provider's offer.
- Continuity of care: Plans must provide a transition period for patients receiving ongoing care from a provider who leaves the network.
The IDR process has been heavily used — far more than regulators anticipated. Providers have initiated hundreds of thousands of IDR disputes, and the process has significant administrative and financial implications for self-funded plans. Ensure your TPA has a robust IDR management process and is tracking dispute outcomes.
CAA Transparency Requirements
The Consolidated Appropriations Act of 2021 added several additional transparency requirements for group health plans beyond the TiC rule:
- Broker and consultant compensation disclosure: Plans must receive written disclosure of all direct and indirect compensation paid to brokers and consultants. Brokers who fail to disclose are in violation of ERISA.
- Gag clause prohibition: Plans cannot enter into contracts with providers, networks, or TPAs that restrict the plan's ability to share cost and quality data with plan participants or to access de-identified claims data.
- Prescription drug reporting (RxDC): Plans must annually report prescription drug spending data to CMS, including the top 50 drugs by spend and the top 50 drugs by cost increase.
- Mental health parity comparative analysis: As discussed in the MHPAEA module, plans must perform and document NQTL comparative analyses.
Compliance Checklist for Self-Funded Plans
Self-funded plan sponsors should verify compliance with the following TiC and CAA requirements:
- MRFs are being produced and posted monthly by the TPA — verify the URL and file currency.
- The price comparison tool is available to members and covers the required 500+ items and services.
- No Surprises Act balance billing protections are implemented in the plan's claims adjudication process.
- IDR disputes are being managed by the TPA with outcome tracking.
- Broker and consultant compensation disclosures have been received and reviewed.
- No gag clauses exist in TPA, network, or vendor contracts — review contracts for prohibited language.
- RxDC reporting has been submitted to CMS by the June 1 annual deadline.
- NQTL comparative analysis is documented and available for DOL review.
Your Action Steps
- 1Contact your TPA and confirm they are producing and hosting compliant MRFs for your plan — request the public URL and verify the files are current.
- 2Confirm your plan's price comparison tool is operational and covers the required 500+ items and services.
- 3Review your TPA contract for any gag clause language that restricts your access to claims data or cost information — such clauses are now prohibited.
- 4Confirm you have received written compensation disclosures from your broker and any consultants advising on the plan.
- 5Verify your TPA has submitted your RxDC report to CMS by the June 1 deadline.
- 6Establish a TiC compliance calendar with monthly MRF verification, annual RxDC filing, and annual broker compensation disclosure review.
Knowledge Check
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