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The next RxDC reporting deadline is June 1, 2023. Are you prepared?

By Nina Terenzi, Mar. 31, 2023
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Understanding and managing the high cost of prescription drugs presents challenges across the U.S. healthcare system. For years, a particularly complex set of pricing variables has frustrated employers sponsoring healthcare plans as well as their plan participants. Under the No Surprises Act (NSA), enacted as part of the Consolidated Appropriations Act, 2021 (CAA), the federal government has recently mandated prescription drug data collection (RxDC) in an effort to create greater system-wide transparency. To comply with RxDC obligations, employer-sponsored healthcare plans and health insurance carriers must now annually report detailed information related to prescription drug and healthcare spending to the Departments of Labor, Health and Human Services, and Treasury.

Below, Eastern Insurance Group will provide an overview of who must comply with RxDC obligations, the information that must be reported and why it is called for, how to submit reports, the schedule for reporting, and how the data will be used. This is not intended to be legal advice but may help risk managers and employers better prepare for the June 1, 2023 reporting deadline.

Who must comply with RxDC obligations?

Insurance carriers and all employer-sponsored healthcare plans, including self-insured and fully-insured plans, must comply with RxDC reporting.

What information must be reported?

The CAA requires insurance companies and employer-based health plans to submit information about:

  • Spending on prescription drugs and health care services
  • Prescription drugs that account for the most spending
  • Prescription drugs that are prescribed most frequently
  • Prescription drug rebates from drug manufacturers
  • Premiums and cost-sharing that patients pay

Up-to-date requirements and other resources on reporting expectations can be found on the Centers for Medicaid and Medicare Services website.

How will the reports be submitted?

Reports must be submitted through the prescription data collection module on the Health Insurance Oversight System (HIOS) located on the CMS Enterprise Portal on the  Department of Health and Human Services’ website.

Employers should determine their level of responsibility for this filing. For many fully- insured plans, the carrier will request (many have already requested) that the company provides the required reports and will contact the account directly with instructions and a deadline. The fully-insured carrier will typically consolidate and submit the reports.  If the employer misses the submission deadline, the carriers may be required to submit incomplete reports and late and/or incomplete submissions may result in an employer having to work directly with the Departments to supply the requested information.

Self-Funded groups may submit these reports on their own or may work with their third-party administrators (TPAs), pharmacy benefit managers (PBMs) or other vendors to submit the RxDC reports on their behalf. That said, the ultimate responsibility for meeting the RxDC reporting obligation belongs exclusively to the employer. There may be a higher level of responsibility for employers offering self-insured plans, as plan management typically requires multiple vendor partners, each of which may hold a portion of the required reporting data. Plan your work accordingly!

What is the reporting schedule?

The first reporting date was December 27, 2022, though a good faith grace period enabled submissions through January 31, 2023. Going forward, the annual deadline is June 1 of the calendar year immediately following the year being reported on—in other words, the second RxDC report is due by June 1, 2023, and will cover data for 2022.

How will the data be used?

The data that is reported by employer-sponsored healthcare plans and insurance carriers will be aggregated and analyzed. Ultimately, the RxDC findings may help:

  • Identify the drivers of rising prescription drug costs and healthcare expenditures,
  • Learn how drug rebates and other remunerations by drug manufacturers influence premium costs and out-of-pocket expenses, and
  • Promote greater transparency in prescription drug pricing.

Aggregate information about prescription drug-pricing trends at the national level will eventually be published on the websites of the Department of Labor, the Department of the Treasury, and the Centers for Medicaid and Medicare Services. At the present, RxDC reporting will not provide a detailed look into the impact of prescription drug pricing and healthcare spending or trends within unique employer-sponsored plans.

Questions?

The No Surprises Act is a law meant to protect individuals covered under group health plans from unexpected medical costs, including those related to prescription drugs. Newly mandated under the NSA, the RxDC reporting obligation may help policymakers gain a deeper understanding of what drives escalating prescription drug costs and may eventually inform their decision-making related to drug pricing. The responsibility for reporting that data belongs to employer-sponsored healthcare plans and insurance carriers. If the reporting process sounds complex, don’t worry. Call an attorney if you believe you need legal advice. And rest assured, your Eastern Insurance Group representative is here to help you understand how to prepare to meet your June 1, 2023 reporting obligation. Contact us today at [email protected].

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