Exploring Transparency in Coverage schema 2.0, prescription drug prices

What is schema version 2.0?

The updated guidance from the Departments announces a new schema version healthcare payers must use to disclose their pricing data. The new schema -- schema version 2.0 -- will replace schema version 1.0, which was enforced on July 1, 2022.

The schemas are part of the Transparency in Coverage final rules released by the Departments in November 2020. They require non-grandfathered group health plans and health insurance issuers offering non-grandfathered group and individual health insurance coverage to publicize prices on their websites.

According to the rules, the pricing information to be disclosed on public websites in separate machine-readable files (MRFs) includes in-network provider rates for covered items and services, billed charges and allowed amounts and prescription drug prices. However, enforcement of the prescription drug prices file has been delayed.

The Departments also issued technical requirements for pricing information covered under the final rules, including putting MRFs on GitHub in the form of schemas. Schemas provide the technical data formats for the MRFs, while GitHub is an online hosting platform that CMS uses to host the repository set of schemas.

The updated guidance stated that schema version 2.0 will "implement revised technical requirements for the in-network file and out-of-network allowed amount and billed charges file."

How schema version 2.0 advances healthcare price transparency

The Departments want to continue expanding healthcare price transparency through MRFs required by the Transparency in Coverage final rules. As such, they intend to release schema version 2.0 to address key challenges they have noticed with current technical requirements.

In the updated guidance, the Departments pointed to concerns with MRFs because of "file size, data integrity, and a lack of critical context that limits full transparency." They said schema version 2.0 will reduce file size by excluding duplicative data, reducing unnecessary data fields and including updates to improve the conceptualization of pricing data.

Specifically, the Departments expect the updated schema version to:

• Eliminate duplicative data by requiring provider groups to be listed once and only referenced in the file versus redefining each provider group for each negotiated rate.
• Decrease the total number of files by mandating a Table of Contents file for plans or policies that share negotiated rates.
• Reduce data redundancy within files by requiring, when applicable, custom place-of-service codes for prices that apply to all locations in lieu of listing all places of service for each negotiated rate.
• Enable users to better navigate data through clear disclosures of the applicable provider network information.

These are some technical optimizations the Departments intend to make with schema version 2.0. However, this is just the start for the Departments, which they acknowledged in the updated guidance. They are also exploring future rulemaking to "refine and improve" MRF requirements under the Transparency in Coverage final rules.

Timeline for updated guidance requirements

Since the release of the updated guidance, the Departments have been working with GitHub to develop schema version 2.0. They intend to complete its development by October 1, 2025, when plans and issuers should be able to access the finalized version’s technical requirements for in-network rate and out-of-network allowed amount and billed charges MRFs on GitHub.

Plans and issuers will have about four months to complete the updates to their MRFs, according to the guidance. That means compliance will be required by February 2, 2026, when the Departments anticipate assessing compliance with schema version 2.0.

In the meantime, plans and issuers should continue to use schema version 1.0. The Departments also said in the guidance that they will introduce new schema elements and reporting requirements, request feedback on the GitHub discussion board and provide diagram examples of files in the new format.

When the Departments finalize the updated schema version on GitHub, they will also provide policy context and an explanation of changes in plain language on the Transparency in Coverage website.

Healthcare payers can also expect a series of webinars hosted by the Departments throughout the finalization process.

Expanding prescription drug price transparency

While healthcare payers wait for the next schema version, they should also anticipate applying this technical update to their prescription drug pricing data.

The Departments released an RFI seeking public feedback on improving prescription drug price transparency. The RFI solicits comments on prescription drug price disclosure requirements, including information on existing file data elements and general implementation. For example, how health plans access necessary data for reporting, if they can, and state approaches to prescription drug price transparency.

Enabling consumer access to prescription drug pricing information can make a real difference, according to Joe Wisniewski, associate VP of channel partnerships and government affairs at Turquoise Health, which provides healthcare pricing solutions.

"Pharmacy rates -- that's something every American can shop for easily and something your employer, your benefits manager could easily use to shop around," he said in an interview. "So, the fact that CMS is going back to that original requirement, and they're asking for public input on how to improve prescription drug price transparency, is a strong indicator that that third file -- those Part D rates -- is coming. It's a question of when, rather than if, when it comes to that Part D data."

Unlike the schema version update, which Wisniewski describes as more of a tactical change, the prescription drug price transparency RFI represents a strategic change when it comes to the government’s approach to healthcare price transparency.

"It's going to give the industry another big moment to start considering how to use this data to shop for healthcare and how to become more competitive," he stated.

Still, the technical updates are important for closing the chapter on the first phase of healthcare price transparency, which focuses on building the technical infrastructure to support pricing information. The new deadlines from the Departments are ushering in the next phase, Wisniewski explained, in which medical billing between payers and providers get more efficient and pulls the consumer more into the center of the billing process.

"Right now, the patient is not considered the end customer because the bill is so delayed in the process. The end customer is usually viewed more as their employer or payer," he said.

"If we can get this transaction efficiency going, and the bill does move up in the revenue cycle, the patient will truly be in the middle of the shopping experience. They will be considered the end customer, and that's when you start to get more of those traditional marketplace forces of people shopping around for healthcare."

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.