» Prescription Drug Reporting: Consolidating the Takeaways

Listen up everyone! The following is an outline of the new required drug reporting law and how you as an employer, provider, or producer are impacted whether self-funded or fully insured.  The law requires group health plans and health insurance issuers offering group or individual health insurance coverage to annually submit to the Departments of Labor, Treasury, and Health &Human Services (CMS) certain information about prescription drug and health care spending.

Why:

• Use this data to study the prescription drug industry
• See if they can regulate this market
• Review market concentration and anti-trust issues

Deadlines (reports on a calendar year basis):

• December 27^th, 2022: reports for 2020 & 2021 calendar year due
• June 1, 2023: report for 2022 calendar year
• June 1 every year following

Applicability:

The biggest question for you as the employer, advisor, or carrier are probably asking yourself is, what do I need to file?

• Plan List (P2 File)
  1. Indicate health plan name (Form 5500 plan name)
  2. Group health plan number (Form 5500 plan number)
  3. Market segment (7 market segments)
  4. Plan year beginning and end date
  5. Members as of 12/31 of the reference year
     1. Covered employees + Covered beneficiaries+ Covered COBRA
  6. Issuer name and EIN
  7. TPA name and EIN (only self-funded)
  8. PBM name and EIN (only self-funded)
• Data Files (D1-D8) – this information is than aggregated by market segment and state
  1. D1 – premium and life years
  2. D2 – Spending by Category
  3. D3 – Top 50 most frequent Brand Drugs
  4. D4 – Top 50 most costly Drugs
  5. D5 – Top 50 Drugs by Spending Increase
  6. D6 – RX Totals
  7. D7 – RX Rebates by Therapeutic Class
  8. D8 – RX Rebates for the Top 25 Drugs
• Narrative Response
  1. Explanatory document (there is no template) but it should contain the following.
     1. Employer size, Net payments for reinsurance, Drugs missing from CMS cross walk, Allocation methods for prescription drug rebates and impact, and Used to describe certain methodologies.

Please note: The information below should be filed to the CMS through its Health Insurance Oversight System (HIOS)

*Registration for the HIOS takes up to 2 weeks, so if you have to file data register ASAP*

Fully Insured Marketplace Action Items for Employers

As you may have realized by now, your carrier has most of the above information, this can make your life easier. However, for compliance reasons, make sure to enter into a written agreement with the issuer (the carrier should be familiar with this). Do not be alarmed if the carrier reaches out for any plan-level data to complete P2 Data File or any questions regarding premiums broken down by participants & employers.

Self-Funded Marketplace

Self-funded plans must either comply or outsource to a TPA, ASO, or PBM; if outsource, enter into a written agreement, and specify who will submit each required filed; timely provide any plan-level or other data required by third party; employer sponsored plan may have to register with HIOS and file some data on your own.

Please note: Even with a written agreement, the “plan” remains responsible, so ensure that the written agreement provides appropriate protections for plan and employer.

Overall, this is boat load of information and can be complicated since we are in a time crunch. If you have any follow-up questions, please set up a meeting with me!

Schedule a meeting with me.

Eleanor Schroeder

Posted by John Hansbrough in ACA, Employee Benefits, Health Insurance, Human Resources, Self-Funding