Dec. 27 Is Deadline for Mandatory Rx Data Reporting

As group health plan sponsors, employers are responsible for ensuring compliance by their vendors (insurers, third-party administrators and pharmacy benefit managers) with the prescription drug data collection (RxDC) reporting requirements. These were added to the Employee Retirement Income Security Act (ERISA) by the Consolidated Appropriations Act of 2021 (CAA).

Under ERISA Section 725, enforced by the U.S. Department of Labor (DOL), group health plans (not account-based plans, e.g., health reimbursement arrangements and health savings accounts, or excepted benefit arrangements) must report details regarding the plan’s prescription drug benefit utilization, including the drugs most frequently dispensed, the most expensive drugs, and the drugs with the highest cost increase for a given calendar year.

Reporting is to be made annually to the U.S. Department of Health and Human Services’ (HHS) Centers for Medicare and Medicaid Services (CMS) enterprise portal’s Health Insurance Oversight System (HIOS) module, starting with the report
due by Dec. 27, 2022, for the 2020 and 2021 calendar years.

After that, annual reporting is due by June 1 following the calendar year (so, the 2022 calendar year report is due by June 1, 2023). The DOL must thereafter post aggregated information on its website so that the public can see trends in prescription drug utilization and pricing.

Compliance Issues

The statute and regulations impose the RxDC reporting requirements on group health plans, which, by default, usually means that requirements and liability for noncompliance are imposed on plan sponsors (generally, employers). Thus, each group health plan sponsor should ensure that all of the RxDC reporting requirements are satisfied for each group health plan subject to the reporting requirements.

Employers should obtain written agreements from plan vendors identifying what data each vendor will upload. Note that the employer remains liable for noncompliance (and subject to excise tax and potential civil penalties), even if it has an enforceable agreement with its vendor to ensure compliance, unless the plan is fully insured and the agreement is with the insurer.

Unfortunately, only the reporting entity can view the files it uploads to HIOS, so there is no way for an employer to confirm on the HIOS module that a vendor uploaded the file(s) it agreed to upload on behalf of the employer’s group health plan. Instead, the employer should obtain written assurance from the plan’s vendor(s) and rely on contractual provisions for recourse if a vendor fails to fulfill its RxDC reporting service as agreed.

How To Comply

HIOS issued specific
reporting instructions that explain the reporting requirements in detail and assure plan sponsors that submission for a plan “is considered complete if CMS receives all required files, regardless of who submits the files.”

Many group health plan vendors (insurers, third-party administrators, pharmacy benefit managers, etc.) have proactively contacted plan sponsors to assure them that the vendor will report at least some of the information on the plan’s behalf. However, not all vendors are willing to accept responsibility for the…