Hickok & Boardman

By Michelina Covey

As we approach the final weeks of 2022, employers are faced with yet another compliance provision of the 2021 Consolidated Appropriations Act.  Only this time, the reporting specifically targets Prescription (Rx) Drug Reporting (also known as the Prescription Drug Data Collection or RxDC).

Under this transparency provision, all employer-sponsored health plans and health insurance issuers are required to report prescriptions drugs and health care spending information to the US Department of Health and Human Services annually, starting with the report due on December 27, 2022 for the 2020 and 2021 calendar years.  After the initial report is submitted, reporting for 2022 and all subsequent years will be due by June 1^st following the calendar year.  For example: reporting for 2022 will be due by June 1, 2023.

This reporting is required for both fully-insured and self-insured group plans, regardless of grandfathered status.   Fully insured plans will more than likely be handled by the carriers, while self-insured plans will need to identify and contract with a TPA/PBM to fulfill with the compliance requirements.

Now that we know the reporting deadlines, what type of information must be included and what happens with the information submitted??  Some examples of the required information includes:

• General information about the plan like the plan sponsor, plan year, number of participants, market segment (small or large group and fully-insured or self-insured), insurer and other vendors, and the states in which coverage is offered, etc.
• Eight (8) data files which include:

• • Premium amounts, including the average monthly premium paid by both employees and the employer;
  • Annual health care services spend categorized by types of cost (including hospital costs, health care provider and clinical service costs, costs for prescription drugs, and other medical costs);
  • Information on the 50 most frequently dispensed brand prescription drugs, and the total number of paid claims for each drug;
  • The 50 most costly prescription drugs by total annual spending, and the annual amount spent by the plan or coverage for each drug; and
  • The 50 prescription drugs with the greatest increase in plan expenditures and for each such drug, the change in amounts expended by the plan or coverage in each plan year.
• A narrative that describes the impact of prescription drug rebates on premium and cost-sharing, how the employer size was estimated (for self-insured plan sponsors), how bundled or alternative payment arrangements attributable to drugs covered under a medical benefit were estimated, and how net payments from government reinsurance and cost-sharing reduction programs were considered (if applicable).  The narrative also is used to identify any drugs prescribed for which a National Drug Code (NDC) was not on the CMS RxDC code crosswalk, and the types of rebates and other remuneration included in or excluded from the eight (8) data files listed above.

A link to the complete Rx data collection instructions can be found below in additional resources.

Once all the information has been analyzed, the DOL must post the aggregated information on its website so that the public can see trends in prescription drug utilization, pricing trends and the impact of prescription drug costs on premium costs.  Exactly when this report will be released, is unknown at this time.

Will this solve the issue of high cost of prescription drugs and healthcare?  More than likely not, at least in the immediate future, but it will provide far more transparency than what has been previously provided.

Additional resources regarding the Rx Reporting, see below:

• Interim Final Rule
• Rx Data Collection Instructions
• Rx Data Collection FAQs