Federal agencies are hoping that they can make health plans’ price transparency reports easier to file and easier for ordinary computer users to use.
The agencies are preparing to post new draft “Transparency in Coverage” program regulations Tuesday.
The TiC reports are supposed to be public, and they are supposed to show what health insurers and health plans really pay for most products and services that they regularly cover, including the prices they pay for everything from bandages to brain surgery, both to the providers in specific provider networks and for out-of-network care.
The agencies want to cut out some types of TiC data, such as information about what podiatrists would charge for open heart surgery; move to posting the pay rates associated with provider networks, rather than with specific health plans; shift to a quarterly TiC report update schedule, from a monthly update schedule; and find other ways to make the “machine-readable files” produced for the TiC program smaller and simpler, according to the 241-page draft regulations packet.
Today, for example, the agencies give health plans a choice between creating the TiC machine-readable files using the .CSV file format or the .JSON format. The agencies said they want to ask plans to shift to all using the .CSV format or the .JSON format, to make the files friendlier to the users, and they’re asking for comments about which format to pick.
The new requirements would apply to small, non-grandfathered self-insured employer health plans, as well as to non-grandfathered fully insured individual and group coverage.
The U.S. Labor Department’s Employee Benefits Security Administration created the draft regulations together with the U.S. Treasury Department’s Internal Revenue Service and the U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services.
What it means: If the health plan TiC regulation update works, employers and benefits brokers might have an easier time using ordinary computers to analyze what nearby health plans are really paying for care.
Federal officials said they are hoping increased access to price information will help employers get better prices for care, but they noted that some economists have predicted that providers will try to use the data to increase what they charge for care.
The backdrop: Federal agencies have been trying to develop health price transparency standards and posting requirements for decades.
Seema Verma, the administrator of CMS during President Donald Trump’s first term in office, tried to overcome obstacles to price transparency by issuing a regulation that required plans to post what they pay in public, machine-readable files.
Congress put legislative power behind the price posting requirements by including similar price posting requirements in the No Surprises Act.
Turquoise Health, a health price data company, and other health price data users have complained that health plan TiC files are still difficult to use, partly because many are incomplete, and partly because many files are huge.
Universa Healthcare, a health insurer in Western New has noted that reporting on “allowed amounts” for out-of-network care produces a set of about 220 files that takes up about 100 billion bytes of drive space.
That’s the equivalent of the amount of drive space needed to hold about 20 billion English-language words, if the words are stored in a plain-text format.
Reporting on the rates paid for in-network care produces about 400 files and takes up 2.5 trillion bytes of drive space.
That’s equivalent to the amount of drive space needed to hold about 500 billion words.
Today, a typical laptop computer has about 500 billion bytes to 2 trillion bytes of hard drive storage, meaning that the TiC price files for one small health plan could fill all of the hard drive space in a new, mostly empty laptop.
Regulation details: The proposed requirements would not apply to employer plans or other major medical coverage arrangements that have been in effect since March 2010; to short-term health insurance plans; to health savings accounts; or to dental insurance, hospital indemnity insurance or other “excepted benefits.”
The requirements would apply to grandmothered plans, or plans changed between March 2010 and January 2014.
The regulations could take effect as early as 2027.
In September, before a conflict over health insurance premium subsidies led to a partial government shutdown, and before Daniel Aronowitz was confirmed as the assistant Labor secretary in charge of EBSA, EBSA said it hoped to complete work on the broker compensation transparency regulations by the end of the year.
The new batch of regulations does not include broker compensation regulations.
Regulators are asking to get comments within 60 days of the official Federal Register publication date.
Elizabeth Schumacher and Sharon Aguirre are the EBSA contacts.
The impact: Officials expect health insurers and third-party administrators to handle the TiC reporting for small health plans.
They estimate, based on government survey data, that there are 2.5 million group health plans sponsored by employers with fewer than 100 employees that are covered by the Employee Retirement Income Security Act in the United States, and that 1.1 million of those small ERISA plans are at least partly self-insured, and 1.4 million are fully insured.
Officials estimated that there are 90,000 non-federal governmental group health plans, and that 36% of those plans are self-insured and 64% are fully insured.
About 84,900 of the non-federal governmental health plans are probably sponsored by entities with fewer than 100 employees.
But officials have also estimated that the entities that would really have to implement the TiC health plan regulations update would be 1,375 health coverage issuers and 205 TPAs.
For those entities, the first-year costs of implementing the update would average $578,298 and annual implementation costs in later years would be $43,165, for a total nationwide cost of $914 million in the first year and $68 million in later years.