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CMS Alert Illustrates How to Identify the Responsible Reporting Entity for Prescription Drug Coverage

EBIA  

EBIA  

CMS Alert: Reminder Regarding Who is the Responsible Reporting Entity (RRE) When Reporting Primary Prescription Drug Coverage Information (Apr. 13, 2021)

Available at https://www.cms.gov/files/document/alert-reminder-regarding-who-responsible-reporting-entity-rre-when-reporting-primary-prescription.pdf

CMS has issued a reminder about who has the responsibility for reporting primary prescription drug coverage as the Responsible Reporting Entity (RRE). As background, certain insurers, TPAs, plan administrators, and fiduciaries are required to report information to CMS about individuals who are entitled to Medicare and are covered under a group health plan. Known as the Medicare Secondary Payer (or MSP) mandatory reporting requirements, the reports are designed to help CMS determine whether a plan is primary to Medicare. For an insured plan, the RRE is generally the insurer, although if an insurer does not process group health plan claims but has a TPA that does, the TPA is the RRE. If a group health plan is self-insured and uses a TPA, the TPA is the RRE (even if the plan is self-administered for certain purposes). Thus, insurers or TPAs are routinely RREs; a limited number of employers (i.e., sponsors of self-insured, self-administered group health plans without TPAs) may also be RREs. Reporting of prescription drug coverage is mandatory for RREs for quarters after January 1, 2020 (see our Checkpoint article), and penalties may apply for noncompliance (see our Checkpoint article).

CMS explains in the Alert that the RRE for prescription drug coverage reporting is the entity that has the direct relationship with the employer/plan sponsor regarding the coverage. Employers should not assume that the RRE is the entity that has direct responsibility for processing and paying the prescription drug claims. For example, where the employer contracts directly with the group health plan for hospital, medical, and prescription drug coverage, CMS advises that the plan is processing and paying the claims directly and will be considered the RRE responsible for reporting. Furthermore, if the employer contracts with the plan for hospital, medical, and prescription drug coverage but the plan carves out the processing and payment of the prescription drug claims to a pharmacy benefit manager (PBM), the plan will still be considered the RRE and will have reporting responsibility. However, if the employer contracts with the plan for medical and hospital coverage only, and with another third party, such as a PBM, for prescription drug coverage, the PBM is considered the RRE because the contract for the prescription drug coverage is between the employer and the PBM directly.

EBIA Comment: Most employer/plan sponsors are not RREs; however, as this Alert points out, the entity considered to be the RRE for purposes of reporting primary prescription drug coverage will depend on how the employer structures its contracts for hospital, medical, and prescription drug coverage. For more information, see EBIA’s Group Health Plan Mandates manual at Section XXIV.J (“MSP Mandatory Reporting Requirement”).

Contributing Editors: EBIA Staff.

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