New Pharmacy and Healthcare Reporting Deadline Approaches
Suzanne D’Amato, Business Contributor
New Pharmacy and Healthcare Reporting Deadline Approaches
Data must be reported on a wide range of categories, including a list of most frequently dispensed prescription drugs paid under the plan, the costliest prescription drugs covered by the plan, and information on rebates from drug manufacturers. In addition, plans must report data showing healthcare spending on hospital, primary and specialty care, other medical costs and services, as well as information about premiums and average participant contributions.
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According to the Centers for Medicare & Medicaid Services (CMS), the data will be used to:
• Identify major drivers of increases in prescription drug and health care spending;
• Understand how prescription drug rebates impact premiums and out-of-pocket costs; and
• Promote transparency in prescription drug pricing.
Recent CMS guidance allows more group health plans to rely on their vendors’ filings, a relief for many employers.
Which Plans Must File?
Fully insured and self-insured group medical plans, including church plans and non-federal governmental plans, are required to complete these filings. Account-based plans such as FSAs and HRAs, and excepted benefit plans like standalone dental and vision plans, are not required to report any plan data.
Unfortunately, group health plan sponsors rarely have access to much of the required information. Although the departments of Labor, Treasury, and Health and Human Services (the “Departments”) acknowledge that the required information resides primarily with vendors, the guidance does not meaningfully shift reporting responsibility to vendors – at least for self-insured plans.
Employers with fully insured plans are legally obligated to complete the filings, but the plan may shift all liability for reporting failures to their insurance carrier if the employer and insurer execute a written agreement requiring the insurer to report the information.
Self-insured medical plans, including church plans and nonfederal governmental plans, are responsible for submitting the data, although most plans will contract with their third-party administrators (TPAs) and pharmacy benefit managers (PBMs) to report the required data. It is important to note that self-funded plans retain ultimate responsibility if the vendor fails to comply.
Reporting Process
The RxDC reports must be submitted through the CMS Health Insurance Oversight System (HIOS) by December 27, 2022. Health plan administrators can and should contract with third parties including TPAs, PBMs and other vendors to report their plan data and in some cases, will need multiple vendors to ensure all required data is reported. For example, a plan may use a TPA to submit information about their health care spending on medical services, but their PBM will need to submit the required pharmacy data.
Employers who find that their vendors cannot or will not complete this reporting on their behalf will need to get the relevant information and report it directly to CMS via the HIOS site. The registration process to use the HIOS site can take up to two weeks, so it is critical that plan administrators understand their reporting status and take steps to register now if necessary.
Reporting Deadlines
Data for calendar years 2020 and 2021 must be reported by December 27, 2022. Data for 2022 must be reported by June 1, 2023.
Vendor Assistance is Essential
Although the CAA technically obligates group health plans to submit RxDC reporting, the Departments hope that most required data will be reported in the aggregate by an insurer or a vendor.
Group health plans will want to confirm the extent to which each vendor with required data will assist with CAA reporting.
Data Aggregation
Initial instructions from CMS presented serious challenges in reporting for employers who have multiple TPAs, PBMs, and other vendors, because those instructions would have imposed responsibility for data aggregation on the plan sponsor. However, in late September, CMS posted new FAQs that vastly simplifies reporting for employers with multiple vendors.
The recent guidance encourages any vendor reporting for multiple plans to submit aggregate data (by market segment and state) for its book of business rather than a separate report for each plan.
Next Steps
Employers with fully insured plans through a single insurance carrier and self-funded plans with only one TPA will have the easiest path for compliance. These plans should be able to rely on their vendors for most of their reporting, but they must enter into a written agreement with the carrier and should seek confirmation that the report has been submitted, requesting proof of submission for recordkeeping purposes. If the plan has changed insurance carriers since January 2020, the plan sponsor will need to contact the prior carrier(s) to complete this process. Note that a special rule applies to mid-year vendor changes that allows for multiple reporting entities to submit the same data file for different portions of the year.
Employers with self-insured plans should confirm which of the required data files their TPA and/or PBM will report, obtain written confirmation of those obligations, and retain proof of those submissions by the vendor for recordkeeping purposes. Self-insured plans will need to verify whether all vendors (including any prior vendors from 2020 and 2021) will submit timely aggregate data files to CMS, including the plan’s data.
Regardless of funding mechanism, all plans relying on a vendor for compliance should ensure that all required data files will be covered by vendor reporting. If so, determine what information needs to be provided to the carrier/TPA/PBM for it to complete the report. If not, the employer plan sponsor may need to create an HIOS account, which should be done very soon in order to meet the December 27, 2022 deadline.
All group health plans will need to ensure that each vendor reporting on behalf of the plan will submit a “P2 file,” which includes various pieces of plan-identifying information (e.g., plan name, plan number, plan year, plan sponsor name, etc.). The employer plan sponsor may need to provide some of this information to the vendor.
In some cases, vendors will also need additional information about other vendors submitting data on behalf of the same employer, such as name and EIN of all other vendors reporting data on the employer’s behalf.
Plan sponsors whose vendors submit multiple data files of the same type should document the extenuating circumstances preventing the submission of a single data file for the plan. They should also consult with legal counsel to confirm whether any additional steps are required to rely on the vendors’ filings.
- Suzanne D’Amato is an employee benefits attorney with 15 years of experience in the field who leads Hilb Group’s national compliance practice.