News

Transparency Reporting: 2nd Prescription Drug (RxDC) Report due June 1, 2023

By Bolton March 30th, 2023

The No Surprises Act (NSA), enacted as part of the Consolidated Appropriations Act, 2021 (CAA), includes transparency provisions requiring group health plans to report information on prescription drugs and health care spending to the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments). This requirement applies to group health plans and health insurance issuers in the individual and group markets but does not apply to account-based plans and excepted benefits.

This reporting process is referred to as the “prescription drug data collection” (or “RxDC report”). While the first RxDC report was due by Dec. 27, 2022 (covering data for 2020 and 2021), the Departments provided a submission grace period through Jan. 31, 2023, and will not consider a plan or issuer to be out of compliance if a good faith submission was made on or before that date.

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. The Departments have stated that, although employers can submit these reports on their own, they expect it will be rare for employers to do so.

Reporting on Pharmacy Benefits and Drug Costs

The NSA requires group health plans and health insurance issuers offering coverage in the group and individual markets to report certain information on plan medical costs and prescription drug spending to the Departments. Specifically, plans must report the following:

The majority of this information may be submitted on an aggregate basis across plans in the same state and market segment. However, the following information cannot be aggregated and must be reported separately for each plan:

Reporting Entities

This reporting requirement applies to both grandfathered and non-grandfathered group health plans and health insurance issuers in the individual and group markets. However, it does not apply to account-based plans (such as health reimbursement arrangements) and excepted benefits.

Plans and issuers may satisfy these reporting obligations by having third parties—such as issuers, TPAs or PBMs—submit some or all of the required information on their behalf. To do this, a plan or issuer must enter into a written agreement with the third party providing the information on its behalf in accordance with the interim final rules. Group health plans are not prohibited from reporting the required information on their own, but the Departments expect this to be rare.

Reporting Deadlines

This is an annual reporting requirement; plans and issuers will generally submit these reports in June each year, reporting information for the prior calendar year. The NSA required the report to be provided by Dec. 27, 2021, and by June 1 of each year thereafter. However, the Departments deferred enforcement of the initial reporting requirement to Dec. 27, 2022. The Departments then provided a submission grace period through Jan. 31, 2023, so long as plans and issuers make a good faith submission of 2020 and 2021 data on or before that date.

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.

Employer Action Steps

Employers should reach out to their issuers, TPAs or PBMs, as applicable, 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. Employers with self-funded plans should monitor their TPA’s or PBM’s compliance.

Contact a Bolton Consultant for additional guidance and support with this reporting requirement.

Please Note: The information contained in this article is not legal advice and should not be relied upon or construed as legal advice. This article for general informational purposes only and does not purport to be complete or cover every situation. Please consult your own legal advisors to determine how this article may affect you.