Are You Ready for the December 27 RX and Health Care Spending Reporting Deadline? 

by Stephanie Raborn, JD

You are probably familiar with the Consolidated Appropriations Act of 2021 (CAA) by now since it contains a host of provisions affecting businesses and their benefit plans. But how much do you know about the CAA-required prescription drug and health care reporting requirements? With a Dec. 27, 2022, deadline looming, it’s time to make sure your group health plan (GHP) is on track to timely comply. Below, we review the agency guidance received thus far on how to do so and provide some tips on how to manage the process.

Remember, CAA Section 204 requires GHPs or insurers to submit general information on your plan or coverage, as well as detailed information related to Rx spending, total health care spending, and the impact of any Rx rebates, fees or other compensation affecting premiums and out-of-pocket costs. We have received several helpful rounds of guidance on how these reporting rules work. Notably, the Department of Health and Human Services (HHS), the Department of Labor, and the Treasury Department (the Departments) collectively issued regulations in November of 2021. HHS later released guidance, including an overview of who must submit and when, data submission instructions, and examples of specific reporting categories. 

While insurers and third-party administrators (TPAs) are expected to provide much of the reporting, GHPs — and by extension in practical terms, health plan administrators — are ultimately responsible for making sure the necessary information is submitted. Without delving into the history of deferred enforcement, the first deadline administrators need to be concerned with is Dec. 27, 2022. This is the date on which reporting information for 2020 and 2021 is due. Reporting for 2022 will be due on June 1, 2023.

So, with that exciting addition to plan administrators’ agendas, let’s review some general information and practical tips to help ensure compliance with Section 204. 

First, understand that data must be submitted via the Centers for Medicare & Medicaid Services (CMS) Health Insurance Oversight System (HIOS) through an RxDC, or prescription drug data collection, module. CMS has provided user-friendly instructions, including help desk contact information, which can be found at https://www.cms.gov/CCIIO/Programs-and-Initiatives/Other-Insurance-Protections/Prescription-Drug-Data-Collection. Familiarity with these instructions will be critical for individuals submitting this information on behalf of a GHP. 

The next practical step is to communicate with your carriers and TPAs about how they will assist since it’s doubtful your GHP has the requisite information on its own. What action is needed will vary depending on your GHP’s structure and the level of the insurer or TPA’s involvement, among other factors. While that makes a one-size-fits-all checklist impracticable, there are several steps you can take to prepare. 

Fully-Insured Plans: 

If your plan is fully insured, you will need to confirm who will submit the required data via the CMS HIOS system. Fully-insured plan administrators will generally be able to rely on insurers for this step but should verify whether the carrier will submit all or a portion of the data on the GHP’s behalf. To that end, administrators should pay attention to carrier communications since carriers may have their own deadlines for you to provide information or a response about filing on your plans’ behalf. At this point some deadlines may have passed.

So who’s responsible for making sure this gets done? The November 2021 regulations indicate that a fully-insured plan can shift liability for failure to comply with reporting requirements to the carrier. The regulations state, “If a health insurance issuer and a group health plan sponsor enter into a written agreement under which the issuer agrees to provide the information required…and the issuer fails to do so, then the issuer, but not the plan, violates the reporting requirements….” But what is sufficient to constitute such written agreement has not yet been clarified. 

A generic email stating what the carrier is willing to do probably would not, under a conservative reading of the rules, constitute a “written agreement” that would shield the plan from liability should the carrier fail to report the requisite information. Certainly, a signed written agreement between the plan sponsor and carrier is preferred and encouraged as a best practice. But practically speaking, a mass communication may be the only assurance you can get from carriers. Clarification from the Departments on this point would be welcome. 

Self-Funded Plans: 

If you have a self-funded plan, the necessary reporting information may reside with multiple sources, so the first step is to determine who has what. For example, self-funded plans — particularly those with carved-out prescription benefits — may have to coordinate with not only the TPA but also their PBM or other vendors. Determining where the information is might be as simple as an email exchange with the relevant vendors, but this is an important step in the data collection process. 

You also have to decide who will perform the actual reporting. It is possible for a plan to meet its Section 204 reporting obligation by having multiple entities submit information on its behalf. Many vendors are giving clients the option to request their individual plan data to submit the reporting themselves, or to allow it to perform at least a portion of the reporting on their behalf. Since data from previous years is needed, if you changed carriers, TPAs or PBMs you should verify they will assist with the required reporting, whether by filing on your plans’ behalf or by providing the necessary information to do so. Most vendors have specific deadlines for providing assistance, and some may have passed.

When deciding who should do your reporting, keep in mind that multiple entities should not submit the same data for a plan, i.e., avoid “double reporting.” So, in essence, plan administrators should keep track of who is reporting what. 

Self-funded plans can enter into agreements with vendors about reporting responsibility, but unlike fully-insured plans, ultimately they cannot shift liability for compliance. This means that a more proactive approach is prudent. Obtain contractual commitments, if possible, from any vendor providing reporting on your plan’s behalf. Just know that vendors may be unwilling to enter into a contractual agreement to bear liability for noncompliance, at least for this round of reporting. You might have more success when negotiating your contract renewal.

There’s a lot to do in a short time. If you haven’t yet, now’s the time to get moving!