Proposed Amendments to Machine-Readable File Mandates: What Employers and Health Plans Need to Know
Executive Order 14221 Ushers in a New Era of Healthcare Price Transparency Compliance
On February 25, 2025, President Donald J. Trump enacted a sweeping Executive Order (EO 14221) that mandates a significant recalibration of federal oversight surrounding healthcare price transparency, particularly emphasizing improvements to machine-readable file (MRF) disclosures. This action set off a regulatory domino effect across federal agencies, prompting the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury—hereafter referred to as “the Departments”—to accelerate their efforts to enhance both the implementation and enforcement of price transparency rules under the Transparency in Coverage (TiC) framework.
On May 23, 2025, these Departments collectively issued a set of frequently asked questions (FAQs) designed to elucidate forthcoming updates. In tandem, they released a Request for Information (RFI) focused specifically on strategies to improve the reporting of prescription drug pricing information, an area long fraught with opacity, inconsistencies, and technical limitations.
Understanding the Regulatory Landscape: Transparency in Coverage Rule Origins
The Transparency in Coverage final rule, first introduced under the Trump Administration in 2020 and further advanced by successive federal action, required group health plans and health insurance issuers in the individual and group markets to publicly disclose three critical categories of data in MRF format:
In-network negotiated rates for all covered items and services;
Out-of-network allowed amounts and billed charges for all covered services; and
Prescription drug pricing, including both negotiated rates and historical net prices.
While the first two requirements came into full regulatory effect on July 1, 2022, the prescription drug MRF component has faced a prolonged enforcement delay. However, in FAQ 61, released as part of the recent guidance update, the Departments formally announced the rescission of the enforcement deferral for prescription drug-related MRFs. This marks a pivotal shift, signaling that stakeholders must now prepare for full compliance with all aspects of the TiC rules, including those that were previously in regulatory limbo.
Technical and Structural Enhancements: Schema Version 2.0 on the Horizon
The Departments have identified several core deficiencies in current MRF implementation. In particular, concerns have mounted over the monolithic file sizes, data duplication, inconsistent data integrity, and the lack of explanatory context that renders many MRFs functionally indecipherable to the general public. To tackle these issues head-on, the Departments have proposed the release of a revised schema—Schema Version 2.0.
Key Features of Schema Version 2.0
File Size Optimization: Redundant data elements will be eliminated to reduce overall file size, making downloads more manageable and enabling faster data parsing by stakeholders and consumers alike.
Streamlined Data Fields: Non-essential data points will be culled to ensure that each field serves a clear compliance or transparency function.
Contextual Enhancements: Data will be enriched with greater context, such as definitions, categorization standards, and cross-referencing with other health plan metrics. This is designed to boost interpretability and utility.
Implementation Timeline
Final Schema Release Date: October 1, 2025
Mandatory Compliance Deadline: February 2, 2026
The Departments are expected to finalize Schema 2.0 after a short public comment period. They are also exploring further rulemaking initiatives aimed at refining and bolstering the foundational requirements of MRF disclosures beyond what was initially envisioned in TiC.
Prescription Drug Data: Renewed Focus and Public Input Request
Prescription Drug MRF Compliance: From Dormancy to Activation
Historically, prescription drug pricing has remained one of the most opaque aspects of healthcare billing. While other areas of TiC have gained traction, prescription drug disclosures have faced logistical bottlenecks, not least due to the complex nature of pharmaceutical rebates, rebillings, and third-party pharmacy benefit manager (PBM) arrangements.
Now, with the enforcement deferral rescinded, the Departments are actively pursuing robust solutions. Through the newly issued Request for Information (RFI), they are inviting public commentary on how best to:
Identify data elements that are substantively meaningful to end users (patients, employers, and regulators);
Eliminate irrelevant or overly technical disclosures that cloud transparency rather than support it;
Accurately capture and reflect rebate values, a notoriously complicated component of pharmaceutical pricing.
This RFI reflects a broader governmental commitment to injecting transparency into drug pricing—one of the most elusive frontiers in U.S. healthcare economics.
Action Plan for Employers and Plan Sponsors: Compliance Readiness
While the newly released FAQs and RFIs are forward-looking in nature and do not impose immediate obligations, employers—particularly those sponsoring self-funded health plans—must begin preparing for the coming compliance requirements.
For Fully Insured Plans
Responsibility: Health insurance carriers are primarily responsible for producing and posting the required MRFs.
Employer Best Practice: Employers should proactively obtain written verification from their insurers confirming that the MRFs are being published on behalf of the group health plan and remain compliant with existing regulations.
For Self-Funded Plans
Responsibility: The burden of compliance lies directly with the employer, though delegation to TPAs or PBMs is permissible under contract.
Delegation Caveat: Even if a third-party administrator (TPA) agrees to handle the technical publication of MRFs, the employer retains ultimate liability. Thus, a formal written agreement is not only prudent but essential.
Posting Obligations and Web Accessibility
If a written agreement is in place, the employer may rely on the TPA to host the MRFs on its publicly accessible website. In the absence of such an agreement, the employer is required to link to the TPA’s published MRFs directly from the employer’s website.
Strategic Employer Actions to Consider Now
Audit Your Existing Agreements: Determine whether current contracts with TPAs and PBMs include language regarding MRF compliance and public hosting duties.
Initiate Transparent Dialogue: Engage service providers to understand their readiness for Schema 2.0, particularly in light of its compressed implementation timeline.
Review Web Posting Infrastructure: Ensure that the employer's website is structured in a way that supports regulatory posting obligations if required.
Key Transparency Challenges: What Needs Fixing?
1. Oversized and Cumbersome Files
Many employers and plan administrators have struggled with the overwhelming volume and technical complexity of current MRFs. File sizes often stretch into multiple gigabytes, making downloads slow and data extractions nearly impossible without advanced computing capabilities.
Schema 2.0 promises relief by pruning irrelevant fields and promoting a modular architecture, where each data point serves a distinct purpose and enhances the file's intelligibility.
2. Inadequate Contextualization
Stakeholders—ranging from policy analysts to healthcare consumers—have voiced frustrations about the cryptic nature of many disclosures. Terminology inconsistencies, lack of metadata, and failure to account for market context (e.g., regional pricing differentials or network variations) undermine the transparency mission.
The Departments are now investing in context layering, which might include comparative analytics, plain-language explanations, and built-in summaries to give users a holistic understanding of what’s being disclosed.
3. Incomplete Prescription Drug Visibility
As rebate structures and PBM-negotiated discounts remain mostly invisible in current reporting paradigms, they represent a black hole in price transparency. The RFI’s emphasis on prescription drug data marks a significant turning point, indicating that future MRFs must go beyond mere sticker prices to include real-world costs after rebates and discounts.
A Glimpse Ahead: The Regulatory Path Forward
The Departments have hinted at further rulemaking beyond Schema 2.0. Here’s what’s likely coming:
Standardized File Hosting Requirements: Uniform protocols for how and where MRFs must be posted.
Audit Mechanisms and Penalties: Expansion of federal enforcement tools for noncompliance, including audits and fines.
Consumer-Facing Portals: Development of public interfaces that allow consumers to compare prices across plans and geographies using MRF data.
API Standardization: Emphasis on Application Programming Interfaces (APIs) to allow seamless data integration into third-party tools, from health cost comparison apps to corporate benefit dashboards.