Transparency in Coverage Update Trims Down Payer MRFs & Brings Back the Rx File

If you ask what something in healthcare would cost, the typical answer is almost always the same: it depends. In 2020, price transparency rules went into effect, promising to bring clarity to both patients and the industry. While we’ve made some significant progress—today Americans can get a personalized estimate before they receive care—when it comes to opaque drug costs, the “it depends” response has survived unscathed. But today for the first time since Transparency in Coverage (TiC) went into effect, HHS and CMS released updates that change that for patients and the industry alike. The prescription drug file is back and payer files themselves are getting an overhaul. It’s hard to overstate how valuable and transformative this new data will be for helping us eliminate the financial complexity of healthcare. Here’s what todays events means.

The Transparency in Coverage updates make payer files significantly easier to use 

This is the first major overhaul of TiC we’ve had since the final rule went into effect in July 2022, the likes of which we’d hoped to see back in December when we published our comments on the proposed rule. We’ll post a detailed technical blog about the specific requirement changes within the final rule shortly, but in essence, the updates will result in significantly smaller, more valuable, and more parseable payer files that make the data foundation under a patient’s out-of-pocket estimate that much more usable.

The updates finally close the prescription drug price gap 

Unlike the hospital and payer data files that've been enforced for years, pharmacy pricing, where most patients actually experience the cost of their care, has sat in regulatory limbo "indefinitely delayed." Today, for the first time, regulators said they plan to move on it by sharing a schema later this year and  enforcing the prescription drug file requirement starting in December 2027.

This is a big, big deal. Prescription drugs make up over 20% of employer spending on healthcare benefits, and it's been the least transparent 20% of the entire healthcare system to date. We’ve made leaps and bounds with the currently available price transparency data (you can get a personalized estimate of what it’d cost to go to the doctor before you go!) but prescription drugs have remained a stubborn, yet critical, outlier. Essentially, if a patient's typical episode of care were a Happy Meal, we’ve been stuck trying to tell them what a Happy Meal will cost without including the cost of fries. With the resurrected inclusion of TiC’s third file, the prescription drug file, the massive gap in price transparency is finally filled. Upfront out-of-pocket estimates aren’t just possible for a single visit or shoppable service, they’ll now be possible for a patient’s entire episode of care, pharmacy counter included.

It’s a big deal for employers, too. Benefits costs keep climbing with prescription spending one of the hardest pieces of an employer’s overall healthcare spending to see clearly. More complete, structured prescription rate data means employers finally get the visibility they need to make smarter purchasing decisions, and by extension, deliver on their fiduciary responsibility currently under major regulatory and patient scrutiny. 

The industry can now create out-of-pocket estimates across a patient’s entire episode of care

A hospital bill, an insurance explanation of benefits, and a pharmacy receipt have always been three related yet strangely unrelated mysteries. For the first time, they’ll all be pushing toward the same underlying idea: structured, standardized, and transparent prices all built to be bundled instead of read in isolation.

That’s today’s true "okay, so what??" When prices for hospital charges, non-hospital charges, and drug charges are all available in organized, defined machine-readable files (MRFs), the foundation to facilitate an accurate, comprehensive patient transaction is infinitely more stable. 

“Price transparency” finally means more than just “prices”

When that happens, “price transparency” stops meaning just a list of prices for items and services and starts meaning transparency of the entire episode of care, start to finish. And that’s exactly what gets you to guaranteed upfront prices for patients. All of the elements that make "what will this cost?" a knowable question before care, not after, are now codified as requirements with enforcement dates. We’ve long sung our “the most complete picture is the most useful one” price transparency tune, and today, that picture just got a lot more complete.