Time is running out: How to prepare for the Transparency in Coverage Rule

February 3, 2022
Josie Livengood

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With less than six months until penalties kick in for the Transparency in Coverage Rule, now is the time to prepare. For those unfamiliar, the IRS, Department of Labor, and Department of Health and Human Services issued this rule to require employer-sponsored group health plans and health insurance issuers in the individual and group markets to make cost-sharing information available upon request to members, their beneficiaries, or enrollees.

Starting July 1st, 2022, employer-sponsored group health plans and health insurance issuers will have to provide:

  • Negotiated rates for all covered items and services between the plan and in-network providers.
  • Historical payments to, and billed charges from, out-of-network providers.
  • In-network negotiated rates and historical net prices for all covered prescription drugs by plans.
  • A self-service tool for enrollees to get personalized out-of-pocket cost estimates for care.

These changes will also impact third-party administrators. This rule could be an indicator of future transparency rules that will affect even more players in the healthcare space. We already have the Hospital Price Transparency Rule, and now this rule. It’s not illogical to think more transparency rules could be coming. We at PointHealthTech are of course all for transparency in healthcare, be it costs or coverage. But, we know these changes can be difficult for the affected parties. That’s why it’s best to prepare now rather than later. So, how can you prepare?

How health plans can prepare.

This rule will create significant work for health plans to gather all relevant data required and display it in an easily readable way. With so much extra work, it would be wise to prepare for extra hires to help you meet the requirements of the rule by July. The other large part of the Transparency in Coverage Rule that health plans need to prepare for is the requirement for a self-service tool for enrollees to get personalized out-of-pocket cost estimates for care. Some health plans already have digital features that potentially fulfill this need. But for health plans that don’t have this feature, or their current one isn’t up to par, they’ll need to partner with digital health companies to launch a self-service tool. Before July, your game plan should be to:

  • Gather negotiated rates for all in-network providers and services.
  • Create a solution for addressing the extra work of analyzing and publishing your data.

How TPAs can prepare.

As a TPA, you can expect many of your clients to come to you with questions. They’ll also look to you for solutions in becoming compliant. This means that TPAs need to become well-versed in the rule's details to design solutions for compliance. If you don’t, you stand to lose clients, revenue, and credibility. Solutions should be customized to TPAs’ specific clients, but solutions exist already that meet some of the compliance requirements. For example, a simple answer to “how do we create a self-service tool for people to see personalized out-of-pocket cost estimates?” is to partner with a company that’s already created this tool. If you’re a TPA reading this, lucky you, we've already created a platform for people to shop and compare medical care and medications based on their coverage. Other solutions will be more customized and hands-on. TPAs with clients who want to be compliant should already be working with those clients to collect historical payments and negotiated rates.

Final thoughts.

Becoming compliant sooner rather than later has several benefits.

  • It can make you stand out from other health plans.
  • For TPAs, it can make you and your client stand out from competitors.
  • It shows your members that you care about transparency, which can help satisfaction ratings and retention.
  • It gives you more time to catch errors before penalties kick in on July 1st.
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