Complying with the Transparency in Coverage Final Rule and No Surprises Act: Taking Baby Steps is the Expensive Way to Go

Taking baby steps is the expensive way

Various elements of the Transparency in Coverage Final Rule and the No Surprises Act have already taken effect, and others will take effect over the next two years.  This staged rollout of requirements (with very significant fines for non-compliance) could encourage employers to opt for piecemeal software solutions that end up being far more costly, in the aggregate, than instituting a total compliance solution from the start.  TALON technology is that total compliance solution.  And it is available today.

Companies which have not complied with the first phase of the Transparency in Coverage Act are already operating in a grace period—sheltering only to those working in earnest toward compliance—that ended July 1, 2022.  Now they must post machine readable files (MRF) that disclose an enormous amount of data about how much health care providers will be paid when employees decide to use their services.  This includes the negotiated rates for every in-network provider and the historical payments to, and billed charges from, out-of-network providers.  Eventually, the MRFs must also include in-network negotiated rates and historical net prices for covered prescription medications, broken down by health plan or prescription issuer and by pharmacy.

An example of an expensive baby step is that the Department of Health and Human Services agreed to permit a half-measure to substitute—but only temporarily—for the July 1, 2022 MRF requirement.  This half-measure involves “simplifying” the machine-readable files into a “Table of Contents” that aggregates the MRF into fewer, larger files.

Software solution providers who offer this baby step, and the customers who purchase it from them, are simply pushing the more complex work down the road a piece.  Why?  Because the many machine-readable files under each entry in the Table of Contents still must be analyzed, in order to provide the meaningful comparative shopping experience that is mandated by the Transparency in Coverage Rule.

Indeed, much more data will soon be required. As of January 1, 2023, every employer must now provide employees an online shopping tool featuring 500 shoppable services and provide total estimated cost and individual estimates of out-of-pockets costs to employees for those 500 services (at a minimum). By January 1, 2024, all other procedures, drugs, durable medical equipment and any other item or service must be published, too. It is possible, maybe even likely, that the broader interpretation of requirements under the No Surprises Act, to allow all services to be shopped, will soon be required, as well.

Companies opting for expensive, staged, piecemeal compliance solutions are adding needlessly to their compliance costs.

A useful analogy might be a government regulation requiring that water served in restaurants be filtered to greater and greater levels of purity, every six months, over the course of two years.  Those contractors who would offer to re-engineer the water filtration system for restaurants each six months, rather than putting in complete solution that complies with the ultimate requirement two years away, might end up making a lot more money by taking baby steps to the same endpoint.  It might be a lucrative business plan for the contractors, but not the restaurants.

Baby steps just don’t make sense when the whole of a journey simply must be completed.  It is inevitable that companies will have to comply with all phases of the Transparency in Coverage Rule and No Surprises Act.  The Biden Administration has made it clear that it is quite serious about levying fines when companies fail to keep pace with the rollout of regulations.

As I have written before, this ought to be a matter of great urgency to America’s employers.  A company with 1,000 employees can expect to be fined well over $35,000,000 a year, for example.  For a company with 10,000 employees, that number would be well over $350,000,000 per year.

There are times when cozying up to a goal and taking cautious, measured steps in the right direction probably makes sense.  This time—when government is absolutely serious about delivering real transparency to the health care marketplace—isn’t one of them.

Mark Galvin
CEO & Founder, TALON


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Ensuring Compliance with the No Surprises Act and Transparency in Coverage Rule