Self-funded employers* just received a reprieve on a new reporting obligation. The Departments of Labor, Health and Human Services and the Treasury (the Departments) have issued an extension of a new reporting requirement with a current due date of December 27, 2022. Given the challenges plans have had in complying with the obligation, the Departments have extended the first deadline to January 31, 2023, for those plans and providers that use good faith and reasonable interpretation of regulatory requirements (see below).
This pertains to the new reporting obligation enacted as part of the 2021 Consolidated Appropriations Act. The new rules require employer-sponsored health plans and health insurance issuers to report information about prescription drugs and health care spending to the federal government annually. The reporting process is referred to as the “prescription drug data collection” (or “RxDC report”).
The first RxDC report was due by December. 27, 2022, and covers data for the 2020 and 2021 reference years. Going forward, the annual deadline is June 1 of the calendar year immediately following the reference year. This means that the second RxDC report is due by June 1, 2023, and will cover data for 2022.
impact on employers
The RxDC reporting requirement applies to employer-sponsored group health plans, including fully insured plans* and self-funded plans. The requirement applies to all plans and employers regardless of the employer’s size and plan. It also includes minimum essential coverage (MEC) plans. However, account-based plans (such as HRAs) and excepted benefits are exempt from RxDC reporting.
According to interim final rules, employers may use issuers, third-party administrators (TPAs), pharmacy benefit managers (PBMs), or other third parties to submit the RxDC reports on their behalf. Federal agencies have stated that, although employers can submit these reports independently, they expect it will be rare for employers to do so.
As applicable, Employers should reach out to their issuers, TPAs or PBMs, to confirm that they will submit the RxDC reports for their health plans. Employers should also update their written agreements with these third parties to reflect this reporting responsibility. In addition, employers with self-funded plans should monitor their TPA’s or PBM’s compliance with the RxDC reporting. Unlike fully insured plans, the legal responsibility for RxDC reporting stays with a self-insured plan even if its TPA or PBM agrees to provide the report on its behalf.
Plan sponsors cannot independently review the information filed directly by the TPA or PBM, so they should take additional steps to get those vendors to ensure they comply.
*Fully insured employers will have to comply as well, but the insurance carriers are taking on the responsibility.
December. 27, 2022 – Extended to January 31, 2023
The first RxDC report is due, covering data from 2020 and 2021.
June 1, 2023
The second RxDC report is due, covering data from 2022.
More information, including RxDC reporting instructions, is available through the Centers for Medicare and Medicaid Services.
Most employers will rely on their TPAs, PBMs, or issuers to provide the RxDC report for their health plans – but they will likely have their obligations as well. Employers will need to work to get the information filed. There are third-party vendors that will perform the work on behalf of the employer, but the deadlines are approaching, and the ability to obtain access to those vendors will be increasingly difficult.