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Administration Finalizes Plan Transparency in Coverage Rule

January 15, 2021

On Thursday, October 29, 2020 the Administration released the finalized Transparency in Coverage Rule. This rule places several requirements on plans and health insurance issuers.

First, most non-grandfathered group health plans and health insurance issuers will be required to make available to participants personalized out-of-pocket cost information, and the underlying negotiated rates, for all covered health care items and services, including prescription drugs, through an internet-based self-service tool and in paper form upon request. An initial list of 500 shoppable services as determined by the agencies will be required to be available via the internet based self-service tool for plan years that begin on or after January 1, 2023. The remainder of all items and services will be required for these self-service tools for plan years that begin on or after January 1, 2024.

Second, most non-grandfathered group health plans or health insurance issuers will be required to make available to the public three separate machine-readable files that include detailed price information:

  • The first file will show negotiated rates for all covered items and services between the plan or issuer and in-network providers.
  • The second file will show both the historical payments to, and billed charges from, out-of-network providers.
  • The third file will detail the in-network negotiated rates and historical net prices for all covered prescription drugs by plan or issuer at the pharmacy location level.

Plans and issuers will display these data files in a standardized format and will provide monthly updates. These files are required to be made public for plan years that begin on or after January 1, 2022.

SPBA has provided extensive feedback to the agencies on this rule in formal comments, including raising issues many self-funded plans will face in gaining real-time access to the information required to be disclosed under this rule.

A similar rule imposing transparency requirements on hospitals is currently scheduled to go into effect January 1, 2021. It was challenged in court, and is currently on appeal with the D.C. Circuit Court after a federal district court upheld the rule. It is likely this final rule for plans could be subject to similar litigation.

It is also unknown at this time what the impact of the current ongoing litigation challenging the Affordable Care Act will have on this rule. The rule language relies on transparency provisions in the ACA. The Supreme Court’s decision on the ACA, whether to uphold, strike down in part, or strike down in entirety, could have a large impact on both of the Administration’s price transparency rules.  The Supreme Court heard oral arguments in this case on November 10, and a decision is expected in early summer 2021.

SPBA will continue closely tracking the rule and keep members apprised of further developments.

The final rule is available here:

A CMS Factsheet on the final rule is available here:

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