On July 1, 2022, the first portion of the Transparency in Coverage (TiC) Final Rule goes into effect. These regulations can be kind of complicated, so we’ve enlisted the help of Turquoise Health’s very own General Counsel, Legal Eagle Dan, and other Turquoise SMEs to answer what we think are the most important questions.

What Is The Transparency in Coverage Final Rule?

The Transparency in Coverage Final Rule mandates two things: 1) All payers must publish their rates via three* separate machine-readable files (MRFs), and 2) They must also publish a member estimate tool that will allow members to get a real-time estimate of benefits. TiC is enforced by The Centers for Medicare and Medicaid Services (CMS).

*It's really two for now: an in-network rates file (all care locations, all services) and an out-of-network allowed amounts file (charges and allowed amounts from historic payments to out-of-network providers). The third file that was required, but has since been delayed, covered prescription drug pricing.

The first MRF portion of this mandate goes into effect on July 1, 2022, with the second estimate tool portion going into effect on January 1, 2023. Now, if you were a good pupil, you might remember that TiC has a fraternal twin named The Hospital Price Transparency Rule. The Hospital Price Transparency Rule applies to hospitals and mirrors the mandates set forth in TiC. There are a couple of key differences between our twins. The most obvious is that each ruling applies to a different group (TiC to payers, Hospital Price Transparency Rule to, well, hospitals). The Hospital Price Transparency Rule is already in effect and has been since January 1, 2021. And, each rule stipulates different contents per MRF. The Hospital Price Transparency Rule requires all negotiated prices for hospital services (as well as cash and list prices), while TiC requires all negotiated prices for hospital services, as well as every other care location (urgent care, ASC, imaging center, professional, etc). So basically, the cinematic universe of transparent prices has expanded from just hospital services to ALL healthcare services.

Lastly, and maybe a more subtle difference, is the increase in technical guidance from the government. Leading up to the Jan 1 effective date, hospitals received minimal guidance from the federal government on MRF standardization. The lack of standardization challenged hospitals, and consequently, influenced the initial slow drip of published files. To improve compliance, CMS has now published a standardized schema for payers to utilize when putting together their own files. This should improve both compliance and ease of data ingestion for yours truly.

Compliance timeline from Jan 1, 2021 - June 2022

Who Does Transparency in Coverage Apply To?

This final rule applies to “non-grandfathered group health plans and health insurance issuers offering non-grandfathered coverage in the group and individual markets...applicable for plan years (in the individual market, policy years) beginning on or after January 1, 2022.” If your brain just short-circuited, don’t worry you’re not alone. Basically, that means that plans that pre-date the Affordable Care Act and have not had significant coverage or membership changes since that time are exempt from TiC. In reality, this exemption applies to very few insurance plans.

How Does This Data Compare To The Hospital Data?

We have collected, parsed, enhanced, and aggregated every public hospital MRF, totaling a little over 2TB worth of data and 1B+ rate records. The payer rates data, on the other hand, is expected to reach the petabyte scale, especially as Turquoise plans to archive historical data for trending comparisons. So, it’s expected to be a significantly larger data set, largely because it not only covers hospital services, but also every other care location and professional rates.

What's included in the hospital rates disclosure versus the payer rates disclosure.

How Will Payer Data Be Used?

Companies like ourselves will ingest the data and make it actionable to the industry. Knowing what we were able to do with hospital data, the payer data will only further the industry’s understanding of the cost of care in the US. Individual payers and/or providers will likely also capture files to analyze where they stand in their own market.

Okay, so what does this mean for the industry?

The price of every service (besides pharmacy) will be public. That means the cost of primary care, imaging, hospital services, urgent care, and even services provided through digital health companies—all prices if they are in-network—will be included in each payer’s MRFs. Let’s contextualize this! *Contextualize This™ theme* Take UHC for example: they have over 70 million lives covered. Think about all of the care being provided to those members… We now have every single price for every covered service for every in-network provider and care location. And that’s just for one payer! Put them all together, and we get an incredible map of healthcare prices across the US.

Not only will we be able to conduct comparisons but now we can map exactly who is in each payer’s network. Think about it, besides those Verizon commercials, do you actually know what a network looks like? With the payer data, we will be able to map every entity that a payer is contracted with and each corresponding negotiated rate. Payers looking to break into a new market will have the roster of other payers in that market and the exact rates those payers have negotiated. Curious about your competitors’ rates? Want insight into their business model? Well, now you’ve got it. That is unprecedented information. With that knowledge, it takes little work to visualize how easy it would be to break into markets, disrupt existing ones, dig into how costs are being shared (or how profits are…), and totally change the landscape of how business decisions are made.

I’m An ASC/Imaging Center. Will My Rates Be Public Too?

Yes. Since you work with payers, and they are mandated to disclose their negotiated rates, your rates will be made publicly available via their MRF. Though you are not mandated by CMS to disclose your own rates, your business partners (payers) are. So your rates will become public, too. If you interact with or rely on negotiated rates, these public prices will have an impact on your business. Read more about what that means for you, here.

How Much Will CMS Fine Me For Non-Compliance?

While CMS has not formally stated how they intend to fine payers for noncompliance with TiC, there are some inferences that the industry can make. To understand the complicated web that makes up these inferences, we recommend three short years in law school (kidding). In essence, TiC is a regulation that came out of the Affordable Care Act (ACA). Since TiC exists (arguably) within the bounds of the ACA, one could then conclude that to be in noncompliance with TiC, is to be in noncompliance with the ACA—and by extension would trigger the same non-compliance measures laid out in the ACA. Following that logic would mean that payers could incur a non-compliance penalty of $100 per member, per day.

Basically: $$$$$$$$$$$$$$$.

When Will Payer Rates Data Be Available On The Turquoise Platform?

We have already started ingesting data where available and plan to make it available on our platform throughout July and August. We are expecting several of the largest payers to post immediately so there should be lots of good data to dive into pretty quickly.

Have more questions about the payer rates disclosure and what this means? We’d be happy to help!