As sponsors of group health insurance plans, employers are responsible for ensuring that their providers (insurers, third-party administrators and drug benefit managers) comply with reporting requirements for drug data collection on prescription (RxDC). These were added to the Employees 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 insurance plans (not account-based plans, e.g., healthcare reimbursement plans and health savings accounts, or excluded benefit plans) must report details regarding the plan’s drug benefits. utilization, including the most frequently dispensed drugs, the most expensive drugs, and the drugs with the most rising cost for a given calendar year.
Report must be made annually to the United States Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) Health Insurance Surveillance System (HIOS) module of the Company Portal, in beginning with the report due by December 27, 2022, for calendar years 2020 and 2021.
After that, the annual report is due no later than June 1 following the calendar year (thus, the report for calendar year 2022 is due no later than June 1, 2023). The DOL must then post aggregate information on its website so the public can see trends in prescription drug use and prices.
Compliance issues
Legislation and regulations impose RxDC reporting requirements on group health insurance plans, which, by default, generally means that the requirements and liability for non-compliance are imposed on plan sponsors (generally, plan sponsors). employers). As such, each group health insurance plan sponsor must ensure that all RxDC reporting requirements are met for each group health insurance plan subject to reporting requirements.
Employers must obtain written agreements from plan providers identifying the data that each provider uploads. Note that the employer remains liable for non-compliance (and subject to excise tax and potential civil penalties), even if they have an enforceable agreement with their vendor to ensure compliance, unless the regime is fully insured and the agreement is with the insurer.
Unfortunately, only the reporting entity can see the files they upload to HIOS, so there is no way for an employer to confirm on the HIOS module that a supplier has uploaded the file(s) they have accepted. to upload on behalf of the employer’s group health plan. . Instead, the employer should obtain written assurance from the plan provider(s) and rely on contractual recourse provisions if a provider fails to perform its RxDC reporting service as agreed.
How to Comply
HIOS has issued specific reporting instructions that detail reporting requirements and assure plan sponsors that a plan submission “is considered complete if CMS receives all required files, regardless of who submit files”.
Many group health plan providers (insurers, third-party administrators, drug benefit managers, etc.) have proactively reached out to plan sponsors to assure them that the provider will release at least some of the information on behalf of the plan. However, not all vendors are willing to accept responsibility for RxDC reporting requirements. Employers need to know which reporting obligations will be fulfilled by the group health insurer or other provider and which reporting obligations must be fulfilled by the plan sponsor.
Most plan sponsors are advised to be prepared to upload at least some of the data to the HIOS module themselves, which means first creating a HIOS account on the CMS portal. Setting up HIOS accounts can take a few weeks. It is therefore important that plan sponsors act now if they have not already done so. CMS has provided step-by-step instructions for setting up the HIOS account.
What is required
Under regulations jointly issued by HHS, DOL, and the US Treasury Department, plans must submit RxDC reports that include:
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General plan information such as plan sponsor, plan year, number of participants, market segment (small or large group and fully insured or self-insured), insurer and other providers, and the states in which coverage is offered, etc.
For information on the “list of plans”, see the model declaration document, using the code P2 for group health plans, at this link.
- — Data on premiums/costs and year of life (average number of members covered) (D1).
- — Expenditure by six categories – hospitalization, primary care, specialist care, other medical costs and services, drugs with known medical benefit and drugs with estimated medical benefit (D2).
- — Top 50 most frequently dispensed brand name drugs by state and market segment (D3).
- — Top 50 most expensive drugs by state and market segment (D4).
- — Top 50 drugs by increase in spending by state and market segment, excluding drugs with emergency use authorization or not approved by the FDA (D5).
- — Total drug expenditure (D6).
- — Drug reimbursements by therapeutic class (D7).
- — Prescription drug discounts for the top 25 drugs by state and market segment (D8).
- A narrator which describes the impact of prescription drug discounts on premiums and cost sharing, how employer size was estimated (for self-insured plan sponsors), how bundled payment arrangements or attributable to drugs covered by a medical benefit were estimated, and how net payments from government reinsurance and cost-sharing reduction programs were taken into account (if applicable).
The story is also used to identify all prescribed drugs for which a National Drug Code (NDC) was not listed on the CMS RxDC Code Mapping Table, as well as the types of discounts and other compensation included or excluded from the data file. D8.
Monica Warren is a manager in the Jackson Lewis PC office in White Plains, NY, where she advises employers on employee benefits compliance. © 2022
Jackson Lewis PC All rights reserved. Republished with permission.
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SHRM onlineJanuary 2022
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