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The Consolidated Appropriations Act of 2021 established a new data collection requirement for employers of all sizes and funding structures, where such entities must now submit annual prescription drug data collection (RxDC) reports on their plan’s prescription drug and health care spending to the Centers for Medicare and Medicaid Services (CMS). The calendar year 2024 reports are due by June 1, 2025. The 2024 RxDC instructions are identical to the instructions provided for last year’s reporting.
RxDC reports from employer group health plans must include a file of general plan information (P2), a data file with details about the plan’s enrollment information and allocation of premium dollars (D1), and seven data files (D2-D8) that primarily reflect statistics about prescription drug usage and medical claims data. Narrative files explaining the data contained in the D1-D8 reports are also required. Of note, RxDC reports are not required for retiree-only plans, excepted benefits, or account-based plans like HRAs, but they are required for all traditional group health plans in all U.S. states and territories.
Because employers do not typically have access to the claims data required to prepare the data files and their accompanying narratives, employers must rely heavily on their carriers, third-party administrators (TPAs), and pharmacy benefit managers (PBMs), and are permitted to have multiple vendors submit data files on behalf of their plan. It is possible that multiple reporting entities will submit files separately on behalf of a single group health plan to provide CMS with all required data and files. Employers should coordinate with their vendors to determine how much of the reporting will be done by the vendor and what, if anything, the employer needs to do to complete the process.
In general, the reporting works as follows:
- The D1 file (which includes information about plan enrollment and premium data) could be completed and submitted by the plan’s carrier, TPA, or other vendor, but there is some information that they may not have. For this reason, some vendors will require the employer to complete and submit the D1 file. In other cases, the vendor may ask the employer to provide certain data, and then if the employer timely responds, the vendor will submit the D1 file.
- Carriers and TPAs will generally complete and submit D2 files (which include health care spending files).
- PBMs will generally complete D3-D8 files (which include pharmacy data files and related data files).
- Each separate filing must also be accompanied by a P2 cover letter-type filing identifying the plan(s) included in that filing.
If the carrier, TPA, PBM, or another vendor submits any files, they will generally submit aggregate data for their book of business within a particular market segment, not plan-specific data.
The most significant challenge many employers face for RxDC reports is identifying a solution for submitting the D1 data, which needs to be filed along with its own P2. Even though the P2 plan information and D1 premium data files are comprised primarily of information employers should know about the health plan they have offered, there are complex requirements within the P2 and D1 file specifications, and it takes weeks to obtain the account with CMS’s Health Insurance Oversight System (HIOS) required for their submission. As a result, most employers will need assistance from a vendor or compliance expert to create and submit these reports through HIOS.
Employers working with a health insurer, TPA, or PBM to submit D1 files on their behalf will likely encounter tight deadlines to provide their vendor employer-specific information for these filings. In some cases, these deadlines may have already passed; in others, a plan’s vendor may refuse to help submit D1 data. The reluctance to help and tight deadlines exist because carriers, TPAs, and PBMs must focus on the “heavy lift” that submission of D2-D8 claims files requires.
For employers whose carrier/TPA/PBM is unwilling or unable to submit D1 on their behalf or for those who have missed their vendor’s deadline, MZQ Consulting is available to prepare and submit D1 and P2 files for your organization. Click here to get more information.
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