Regulators Remove Enforcement Relief for Two Transparency Requirements

In FAQs Part 61, federal regulatory agencies announce they are removing enforcement relief for the following  two Transparency in Coverage (TiC) requirements related to Machine Readable Files (MRFs):

• MRFs have been required for medical claims for the last year (since July 1, 2022), but FAQs Part 49 Q&A #1 delayed MRFs for prescription drug claims due to concern over potential conflicts with the separate RxDC reporting requirements. There is no longer a concern of any potential conflicts and they will announce an implementation timeline soon for prescription drug MRFs.
  • MRFs provide monthly de-identified claims information in very specific formats that data scientists can download from public websites for research purposes.
  • Insurance companies (issuers) and third party administrators (TPAs) have been providing these files on their public websites and updating them monthly. However, when the employer’s health plan is self-funded, the employer is ultimately liable to ensure MRFs are accurate, complete, and published monthly on a public website.
  • Issuers and TPAs, along with pharmacy benefit managers (PBMs), will watch for implementation guidance to start publishing MRFs for prescription drug claims to their public websites. Employers with self-funded plans will be responsible for ensuring the accuracy, completeness, and monthly publishing of these MRFs.
• FAQs Part 53 had announced a temporary enforcement safe harbor for MRF in-network rate files for “circumstances where it was extremely difficult or impossible for a plan or issuer to determine and report an applicable rate for specific items or services provided under “percentage-of-billed-charges” contracts if an exact dollar amount cannot be determined for an item or service prospectively.” This general enforcement safe harbor is being removed.

Since issuers are directly liable for the MRF requirements, employers with fully insured medical/Rx plans should be able to rely on their insurance company to facilitate medical and prescription drug MRFs.  It’s ideal to secure written confirmation that the issuer is complying with all MRF obligations.

Employers with self-funded health plans are not typically in a position to monitor their TPA and PBM’s MRFs for accuracy, completeness, and monthly publishing to public websites.  Because it is ultimately the employer/plan administrator’s responsibility, we encourage employers to request their TPAs and PBMs to include language in service agreements to indemnify the employer when there are problems that result in enforcement action.  Whether the TPA or PBM will agree to such language is uncertain, and the employer might be put in a position to decide whether to maintain an agreement without indemnification or seek another TPA or PBM partner who will agree to be held accountable for MRF compliance.

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information. This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.