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What Are Prescription Drug and Health Care Spending Reports and When Are They Due?



QUESTION: We’ve heard that the requirement to report prescription drug and health care spending to the government has been delayed. What are the reporting requirements and when are the reports due?

ANSWER: Legislation passed in 2020 requires group health plans and insurers to annually report prescription drug and health care spending, premiums, and enrollment information to the government (see our Checkpoint article). In addition to general identifying information such as the beginning and end dates of the plan year, the number of enrollees covered, and each state in which the plan is offered, a broad range of health care spending information must be reported (see our Checkpoint article). For example, the average monthly premium paid by employees versus employers must be reported, as well as the total health care spending broken down by type (such as hospital care, primary care, and specialty care) and prescription drug spending by enrollees versus plans and insurers. Plans and insurers must also report the 50 most frequently dispensed brand prescription drugs, the 50 costliest prescription drugs by total annual spending, and the 50 prescription drugs with the greatest increase in plan or coverage expenditures from the previous year. HHS has released data submission instructions that review who must report and explain how to submit the data through the RxDC module in the Health Insurance Oversight System (HIOS) (see our Checkpoint article).

Information must be submitted based on the “reference year,” which the agencies have defined as the calendar year immediately preceding the calendar year in which the data submission is due. Calendar year 2020 information was initially required to be submitted by December 27, 2021; calendar year 2021 information by June 1, 2022; calendar year 2022 information by June 1, 2023; and so on. However, the agencies advised that they would not initiate enforcement actions against plans or insurers that submitted the required data for the 2020 and 2021 reference years by December 27, 2022. In December 2022, reporting for those years was delayed again until January 31, 2023. The agencies will not take enforcement action with respect to any plan or insurer that submits on or before that date, using a good faith, reasonable interpretation of the regulations and the RxDC reporting instructions. Several clarifications and reporting flexibilities were also provided (see our Checkpoint article). The deadline for reporting 2022 data remains June 1, 2023.

For more information, see EBIA’s Health Care Reform manual at Section XXXVI.L (“Prescription Drug and Health Care Spending Reporting”). See also EBIA’s Self-Insured Health Plans manual at Section XXIX.D.4 (“Prescription Drug and Health Care Spending”) and EBIA’s ERISA Compliance manual at Section XXI.C (“Caution Regarding Additional Obligations”).

Contributing Editors: EBIA Staff.

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