Prescription Drug Reporting is due by December 27, 2022
A new transparency provision, enacted as part of the 2021 Consolidated Appropriations Act, requires employer-sponsored health plans and health insurance issuers to annually report information about prescription drugs and healthcare spending to the federal government. This reporting process is referred to as the “prescription drug data collection” (or “RxDC report”).
The first RxDC report is due by Dec. 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.
RxDC Impact on Employers
The RxDC reporting requirement applies to employer-sponsored group health plans, including fully insured plans and self-funded 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 on their own, they expect it will be rare for employers to do so. Most employers will rely on their issuers, TPAs, PBMs, or issuers to provide the RxDC report for their Health Plans. More information, including RxDC reporting instructions, is available through the Centers for Medicare and Medicaid Services.
RxDC 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. 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.
Health Plans Must Provide Price Comparison Tool for 2023
Beginning in 2023, group health plans and health insurance issuers must make an internet-based price comparison tool available to participants, beneficiaries and enrollees. The purpose of this tool is to provide consumers with real-time estimates of their cost-sharing liability from different providers for covered items and services, including prescription drugs, so they can shop and compare prices before receiving care. Upon request, plans and issuers also must provide this information in paper form or over the telephone.
Price Comparison Compliance Deadlines
For plan years beginning on or after Jan. 1, 2023, plans and issuers must make price comparison information available for 500 shoppable items, services and drugs. For plan years beginning on or after Jan. 1, 2024, price comparison information must be available for all covered items, services, and drugs. More information, including the list of 500 items and services, is available through the Centers for Medicare and Medicaid Services.
Price Comparison Action Steps
Most employers will rely on their issuers or third-party administrators (TPAs) to develop and maintain the price comparison tool and provide related disclosures on paper or over the phone upon request.
- Fully insured plans—Employers with fully insured health plans should confirm that their issuer will comply with the price comparison tool requirements beginning with 2023 plan years and ensure this compliance responsibility is reflected in a written agreement.
- Self-insured plans—Employers with self-insured plans should reach out to their TPAs (or other service providers) to confirm they will be in compliance by the deadline and update agreements to reflect this responsibility. In addition, employers should monitor their TPAs’ compliance with this requirement. Unlike fully insured plans, the legal responsibility for this tool stays with a self-insured plan even if its TPA agrees to provide the price comparison tool on its behalf
Contact Bolton if you need assistance complying with Transparency in Coverage requirements.
Please Note: The information contained in this letter is not legal advice and should not be relied upon or construed as legal advice. This letter is 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 these laws affect you.