Updated schema & enforcement date for payers, 5 months to comply

If you’re reading this, you probably spent part of this morning like us: frequently updating CMS resource hubs looking for any signs of the promised Transparency in Coverage (TiC) schema version 2.0. Despite a government shutdown, CMS released the GitHub changes, which impact payer machine-readable files (MRFs), right on schedule.

These updates represent a shift in focus from hospital compliance to payer compliance, with a precise enforcement date 5 months from today. When anticipating the impact of regulatory changes, it’s valuable to use hospitals as a guide. Historically, when CMS has updated hospital MRF schemas, we’ve seen a jump in the quality of data. We suspect that payers will have a renewed effort to ensure compliance, resulting in more data coverage.

While in the long run, these changes will reduce complexity and payer MRF file size, in the short term, there will be a period of confusion while payers adjust. For example, the schema changes will consolidate multiple fields into a single field. Users of price transparency data must have the ability to merge both V1 and V2 schemas during this transition period. Thankfully, the Turquoise team has plenty of experience with this, given last year’s hospital MRF updates.

Turquoise turns five this year, and these changes represent the conclusion to the first chapter of price transparency: a period that focused solely on MRF changes, almost exclusively used by industry insiders. We’re about to embark on the next chapter of the next half-decade, one that focuses on a patient-centric transaction, where rates are bundled and presented in easy-to-understand language for all.

TL;DR

For those of you who didn’t hit refresh all morning, here’s the quick executive summary:

• This is the first time since July 1, 2022, that payer MRFs have been updated, indicating that the focus of compliance is shifting from hospitals to payers. CMS announced an enforcement date of 2/2/2026 for the updated schema requirements, and we anticipate more information about enforcement at that time.
• The changes themselves are more tactical than strategic in nature. Overall, the focus appears to add more context to prices and shrink down payer MRF data sizes.
• We’ll be tracking payer MRF compliance rates after the new schema goes into effect to see if quality improves overall.

Specific Changes Overview (in order of importance):

Still here? You’re one of us. Congrats. Let’s get into it.

In-Network Changes

• Business_name is required when the EIN is present, making it easier to figure out which rates are tied to a specific provider.
• Here at Turquoise, we’ve had to create an entire layer of enrichment to solve this problem. We’re excited for even higher levels of accuracy by combining our approach with this new field.
• Severity_of_illness allows APR-DRGs to be accurately posted in the MRF files while also reducing duplicates.
• Remove “location files” to make ingestion significantly easier for all users of payer data.
• Consolidated bundled_codes and covered_services into a new single “contained_billing_code” object. This will reduce file size, but will result in a confusing period where payer MRFs have both schemas live during the transition.

Out-of-Network (Allowed Amounts) Changes:

• Separating the plan_sponsor_name from the plan name will make navigating some payer MRFs easier. Employers will be able to clearly see the name of the company in the files.
• Reduced threshold for reporting: Clarification on the 20-claim reporting threshold. Likely will increase the quality of these files.

What we want to see in the future

While we are excited about the first payer schema changes since 2022, there is room for further improvement. We’d love to see the following:

Pharmacy schema be enforced after this summer’s RFI.

• The pharmacy rates were going to be the “third file” to be posted by payers all the way back in 2022. We’ve seen payers like Optum and BCBS of TX, voluntarily post some pharmacy rates, showcasing that the burden to do so is achievable.

Clear naming convention for payer networks

• A standardized naming convention for payer networks would greatly reduce the file enrichment process for both hospital and payer MRFs, because payer network names would be the same across files.

Requirements for stop-loss

• Inpatient outlier costs account for $100 billion in annual healthcare spending, but are not captured in current price transparency disclosures.

Clarification of negotiated types

• Payer MRFs frequently use the fee schedule and negotiated fee interchangeably, resulting in further confusion.

Overall, this is an important nudge, but not a leap towards clarity in the payer MRFs. With the conclusion of the price transparency’s five-years-to-adoption phase, we hope that the conversation will begin to move past “what files and rates are posted?” to “what files and rates are complete, accurate, and useful?” if we want patients to ultimately enjoy the fruits of price transparency in healthcare.