Compliance News | October 17, 2023

Machine-Readable Rx Files Enforcement Back on Track

The Departments of Treasury, Labor and Health and Human Services (the Departments) issued updated guidance on the Transparency in Coverage (TiC) final rule, reinstating enforcement of the machine-readable file requirements for prescription drug negotiated rates.

To meet the requirements for prescription drug machine-readable files, plan sponsors will likely need assistance from their prescription drug benefit administrators.

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For plan years beginning on or after January 1, 2022, the TiC final rule requires non-grandfathered group health plans and insurers to publish on a public website three separate machine-readable files disclosing: 

  • In-network provider rates
  • Out-of-network allowed amounts and billed charges
  • Negotiated rates and historical net prices for covered prescription drugs

However, under FAQs Part 49, issued August 20, 2021, enforcement of the requirement that plans publish machine-readable files related to prescription drugs was deferred pending further consideration by the Departments. The Departments were concerned whether this requirement potentially duplicated the requirement to report drug costs under the Prescription Drug Data Collection (RxDC) program that was adopted as part of the Consolidated Appropriations Act, 2021 (CAA).

In a separate enforcement deferral in FAQ Part 53, issued April 19, 2022, the Departments also provided an enforcement safe harbor from the TiC rule for plans that use alternative reimbursement arrangements for in-network provider rates.

Updated guidance ends enforcement deferral and safe harbor

FAQs Part 61, issued on September 27, 2023, rescinded FAQs Part 49’s deferral of enforcement of the prescription drug machine-readable file requirement. The Departments stated that the CAA requires disclosure of different and additional information than required in the TiC final rule, and that there is no need for continued enforcement discretion.  Rather, future enforcement of the prescription drug machine-readable file requirement will be on a case-by-case basis depending on facts and circumstances. The Departments intend to develop technical requirements and an implementation timeline in future guidance.

Additionally, FAQs Part 61 rescinded the enforcement safe harbor described in FAQs Part 53 relating to machine-readable files for in-network provider rates under alternative reimbursement arrangements. The Departments clarify that future enforcement discretion might be warranted on a case-by-case basis in circumstances where it is extremely difficult or impossible for a plan to determine and report an applicable rate for specific items or services.

Implications for plan sponsors

Plan sponsors that relied on the deferred enforcement of the prescription drug machine-readable file requirements will now have to take steps to become fully compliant. Although presently there is little guidance, the Departments have signaled that they will issue technical guidance and an implementation timeline to assist plan sponsors as they transition to full compliance. Plan sponsors may want to consult their prescription drug benefit administrator for assistance.

Similarly, sponsors of plans using alternative reimbursement arrangements that previously relied upon the enforcement safe harbor for machine-readable files for in-network rates need to reassess their ability to determine specific dollar amounts for the in-network rate element. Going forward, enforcement relief will be provided only where compliance is extremely difficult or impossible.

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.