MSP Reporting of Prescription Drug Coverage to Be Mandatory as of 2020

In response to the SUPPORT for Patients and Communities Act enacted in October 2018, CMS has issued guidance on new Medicare Secondary Payer (MSP) reporting requirements for prescription drug coverage, which will become mandatory for responsible reporting entities (RREs) effective January 1, 2020. As background, certain insurers, TPAs, plan administrators, and fiduciaries are currently required to report information to CMS about individuals who are entitled to Medicare and are covered under a group health plan. The reports are designed to help CMS determine whether a plan is primary to Medicare (that is, whether a plan pays first and Medicare is a secondary payer). For insured plans, the RRE is generally the insurer, although if a TPA processes group health plan claims for the insurer, the TPA is the RRE. For self-insured plans with TPAs, the TPA is the RRE. Employer sponsors of self-insured, self-administered group health plans without TPAs may also be RREs.

CMS has revised its MSP User Guide and issued FAQs explaining that RREs already have the option to submit primary prescription drug coverage information as part of their mandatory MSP reporting. RREs that have been voluntarily reporting primary prescription drug coverage information will continue to report when it becomes mandatory for quarters after January 1, 2020. RREs that have not reported prescription drug coverage should consult the updated User Guide for instructions. The FAQs warn that the entity considered to be the RRE for purposes of reporting primary prescription drug coverage will depend on how the plan sponsor structures its contracts for medical, hospital, and prescription drug coverage, and it should not be assumed that the entity with direct responsibility for processing and paying the prescription drug claims is the RRE. For example, if a group health plan sponsor independently contracts with a third party such as a pharmacy benefits manager (PBM) to administer prescription drug coverage, then the third party or PBM is considered the RRE for prescription drug reporting purposes.

EBIA Comment: Although only a few employers are RREs for MSP mandatory reporting purposes, employers may be asked to assist their insurers or TPAs in compiling information about participants in their group health plans. CMS has emphasized the importance of employer cooperation with their plans’ RREs, noting that employers that do not provide the necessary information to the RREs are putting their insurers and TPAs at risk for noncompliance with reporting requirements. For more information, see EBIA’s Group Health Plan Mandates manual at Section XXIV.J (“MSP Mandatory Reporting Requirement”). See also EBIA’s Self-Insured Health Plans manual at Section XXV.C (“Coordination of Benefits With Medicare, TRICARE, and Medicaid”); EBIA’s Consumer-Driven Health Care manual at Sections XXV.F (“HRAs and Medicare Secondary Payer (MSP) Requirements (Including Mandatory Reporting)”) and XVIII.D (“HSAs and Other Laws”); EBIA’s Cafeteria Plans manual at Section XXII.J (“What Other Federal Laws Apply to Health FSAs?”); and EBIA’s COBRA manual at Section XXX.D (“Medicare Secondary Payer (MSP) Rules”).

Contributing Editors: EBIA Staff.