Transparency in Coverage TPA Guide: Compliance and Requirements

What is Transparency in Coverage and whom does it bind?

Transparency in Coverage is a 2020 federal rule issued by the Departments of Health and Human Services (HHS), Labor, and the Treasury. The rule requires health plans to disclose pricing data to the public and to plan members. It binds non-grandfathered group health plans, including self-funded ERISA plans, and issuers in the individual and group markets.

The rule excludes grandfathered plans, excepted benefits, short-term coverage, and account-based plans like health reimbursement arrangements. The mandate operates in two parts: a public dataset of machine-readable files and a member-facing internet-based cost-estimate tool.

Key takeaways:

• TiC is a 2020 federal rule from HHS, Labor, and the Treasury.
• It applies to non-grandfathered group health plans and self-funded ERISA plans.
• It mandates the public release of pricing data and personalized cost-estimate tools.

What are the machine-readable files a self-funded plan needs?

The TiC mandate requires three public machine-readable files per plan: an in-network rate file, an out-of-network allowed amount file, and a prescription drug file. The in-network and out-of-network files have been enforced since July 1, 2022. Following an October 2026 CMS update, the prescription drug file is now slated for enforcement in December 2027.

These files must be hosted on a public website, updated monthly, and accessible without a login or fee. According to the federal government's FAQ 55 issued in August 2022, a self-funded plan can meet its obligation by pointing from its own site to files hosted on a TPA or network website.

Comparison of Machine-Readable Files

What goes in the TiC in-network rate file?

The TiC in-network rate file details the negotiated rate disclosure for every covered item and service between the plan and in-network providers. Entries must identify items by billing code (like CPT or HCPCS) and providers by their National Provider Identifier (NPI) and Tax Identification Number (TIN). The file also specifies the rate type, such as a flat negotiated rate or a percentage, alongside the place of service.

For plans renting a national network, the network typically holds the contracts and generates the file. The TPA simply ensures the plan links to the network's index correctly. Plans using direct contracts must build the file directly from the TPA's claims system.

What goes in the out-of-network allowed amount file?

The out-of-network allowed amount file lists the amounts a plan actually paid, alongside billed charges, for out-of-network services over a 90-day lookback window. Because this file relies on historical paid claims rather than standard contracts, the TPA's claims history is the only source capable of generating it.

To protect patient privacy, the 2020 TiC final rule originally suppressed entries with fewer than 20 claims for a specific provider and item. An October 2026 update dropped this minimum claim threshold from 20 to 11. This file exposes the plan's out-of-network pricing methods, making it critical for sponsors to review the data before publication.

What must the price transparency cost estimate tool show?

The price transparency cost estimate tool must show members their estimated out-of-pocket liability for specific services under their active plan. The 2020 rule requires the tool to display cost-sharing liability, accumulated deductibles, in-network negotiated rates, out-of-network allowed amounts, and any prerequisites like prior authorization.

The tool was phased in over two years. It required 500 shoppable services starting January 1, 2023, and expanded to all covered items and services for plan years beginning January 1, 2024. Members must be able to search by billing code, descriptive text, or specific provider.

Who handles plan sponsor transparency obligations versus TPA duties?

Under the TiC rule, a self-funded plan holds the ultimate legal responsibility for compliance. While an insured plan can legally transfer liability to its issuer, plan sponsor transparency obligations prevent a self-funded plan from shifting that burden to a TiC compliance TPA. However, the 2020 Final Rule includes a "good faith" safe harbor, meaning a plan will not fail compliance if it makes an error but corrects it promptly.

In practice, the work is divided. The network generates the in-network file, the pharmacy benefit manager prepares the drug data, and the TPA builds the out-of-network file from claims. The TPA also maintains the plan's entry in the index and powers the cost-estimate tool.

Why is it hard for a TiC compliance TPA to extract this data?

Extracting pricing data from a claims system is difficult because a claims system stores a contract as a set of rules for pricing a claim, not as a static list of rates to publish. A TPA system evaluates complex logic, like lesser-of language or case rates, against an active claim. Without an active claim, the system struggles to output a single rate per code.

Additionally, rental network contracts often reside outside the TPA's system. While the CAA gag clause attestation prohibits contracts that restrict access to provider-specific cost data, gathering that data remains a hurdle. Regenerating these massive files monthly requires an automated pipeline, not just a simple report.

How does a transparency project impact TPA workflows?

A TPA attempting to produce TiC files quickly identifies gaps in its pricing data. If plan rules are not properly configured, the TPA cannot generate accurate files. These same gaps force examiners to manually re-price claims or reference external documents.

Fixing these data gaps directly improves the core claims system. When rates and rules are fully configured, agents do the volume work and the TPA's people make every decision on complete files. Daybook Health assists TPAs by mapping these workflows. Every engagement begins by finding where work falls outside the system, enabling true onshore claim adjudication without offshoring. Furthermore, Daybook ensures robust data security when moving contracted rates between parties.