Dec 06, 2022
The RxDC reporting provision of the Consolidated Appropriations Act (CAA) requires reports on drug utilization and spending trends to be submitted to U.S. Department of Health and Human Services beginning December 27, 2022.
Subsequent reports are due annually by June 1.
Background
Health plans, including grandfathered plans, and health insurance carriers will be required to submit certain information about prescription drug and health care spending to the agencies annually. The agencies plan to use this information to issue public reports on prescription drug pricing costs and trends beginning in 2023. CMS calls the reporting requirement the “RxDC Report” (“Rx” stands for “Prescription Drug” and the “DC” stands for “Data Collection”).
Plans and carriers must annually submit certain information on prescription drug and other health care spending, including:
- General information regarding the plan or coverage;
- Enrollment and premium information, including premiums paid by employees versus employers;
- Total health care spending, broken down by type of cost (hospital care; primary care; specialty care; prescription drugs; and other medical costs), including prescription drug spending by enrollees versus employers and carriers;
- The 50 most frequently dispensed brand prescription drugs;
- The 50 costliest prescription drugs by total annual spending;
- The 50 prescription drugs with the greatest increase in plan expenditures from the previous year;
- Prescription drug rebates, fees, and other remuneration paid by drug manufacturers to the plan or carrier in each therapeutic class of drugs, as well as for the 25 drugs that yielded the highest amount of rebates; and
- The impact of prescription drug rebates, fees, and other remuneration on premiums and out-of-pocket costs.
Who Is Responsible For Compliance
Fully-Insured Plans
In most cases, employers who sponsor fully-insured plans will be able to rely on the carrier for compliance. In fact, most of the rules discussed in the guide specifically make the carrier responsible for compliance. Some of the Transparency Requirements may require that the employer enter into a “written agreement” with the carrier, but the exact form of that written agreement is not defined. Most carriers have taken the position that existing language in the group contract that clarifies that the carrier is responsible for complying with all applicable laws and regulations, along with communications they have sent to their clients in the form of emails and FAQs, is enough. At a minimum, fully-insured employers should have a discussion with their carrier regarding compliance with these rules.
Self-Insured Plans
The issue is more complicated for employers who sponsor self-insured plans. In this case, technically, the employer is usually the entity that is liable for the compliance of their plan. This is even the case when, from a practical perspective, most of the responsibility will fall on the shoulders of the administrator or other vendor. Employers who sponsor self-insured plans will need to ensure that their vendors are fulfilling their obligations so that the employer’s plan is in compliance with the rules. For this purpose:
- Employers/Plan Sponsors should reach out to their vendors to discuss their plans for compliance and ask for written assurances.
- Service agreements and contracts should be reviewed and amended as necessary to ensure that the administrator or other vendor is taking the necessary steps to comply with the applicable rules.
- Employers should ask vendors if there will be any additional costs related to compliance with these rules.
- Indemnification language in existing contracts should be reviewed and updated, if necessary, to protect the employer in cases where a vendor is not able to comply with a rule or regulation.
Learn more about our carrier partners plans for reporting.
Download Amwins Connect Health Cost Transparency Guide for Employers
