Employee Benefits Compliance

Second Prescription Drug (RxDC) Report for Pharmacy Transparency in Health Plans Is Due by June 1, 2023

Woman looking at prescription pill bottle

Since December 27, 2022, health plans and insurance carriers have been obligated to submit annual prescription drug reports, called Prescription Drug Data Collection or “RxDC”. See the prior Leavitt Group article. The deadline to submit their second prescription drug data collection (RxDC) report is June 1, 2023. This is an annual reporting requirement that mandates submission of the previous plan year’s RxDC report by June 1 of each year for the preceding year. This June’s submission will be the first to be completed at the “normal” time of year (December 27, 2022 was the first submission for the 2020 and 2021 years).

What is RxDC Reporting?

To comply with the RxDC reporting requirement, health plans and issuers must annually submit information to the Departments of Labor, Health and Human Services and the Treasury (Departments) about:

  • Spending on prescription drugs and health care services;
  • Prescription drugs that account for the most spending;
  • Drugs that are prescribed most frequently;
  • Prescription drug rebates from drug manufacturers; and
  • Premiums and cost sharing that patients pay.

Insured plans can rely on the insurance carrier to submit the data, while self-funded plans and those plans with Pharmacy Benefit Managers (PBM) (i.e., carve-out plans) will carry the obligation to collect and submit the data, and/or work with Third-Party Administrators (TPA), PBMs or other administrators to have them submit the necessary data. Contact your Leavitt Group Trusted Advisor for more detailed information on who is best suited to submit which of the approximately ten data files that make up RxDC reporting.

Reporting Deadlines

The first RxDC report was due by Dec. 27, 2022 (covering data for 2020 and2021); however, the Departments provided a submission grace period through
Jan. 31, 2023. The second RxDC report is due by June 1, 2023, and must include data for 2022. At this time, the Departments have not provided any extensions to this deadline.

Health Plan Compliance

Health plans may use a TPA or PBM—to prepare and submit the RxDC report on their behalf. To do this, a plan must enter into a written agreement to address this reporting responsibility. Health plans are not prohibited from submitting RxDC reports on their own, but the Departments expect this to be rare.

If the issuer of a fully-insured group health plan is required by written agreement to submit the RxDC report but fails to do so, then the issuer—not the plan—violates the reporting requirements. However, unlike fully insured plans, the legal responsibility for RxDC reporting stays with a self-funded plan even if a third party (for example, TPA or PBM) agrees to provide the report on the plan’s behalf.

Action Steps

Employers should consider taking the following steps to comply with the RxDC reporting requirement:

  • Reach out to issuers, TPAs or PBMs, as applicable, to confirm they will submit the RxDC report for your health plan;
  • Promptly respond to any information requests from the third party submitting the RxDC report for your health plan;
  • Confirm that your written agreement with the third party submitting the RxDC report has been updated to include this reporting responsibility; and
  • For self-funded health plans, monitor the third party’s compliance with the RxDC reporting requirement.

Be sure to talk to your Leavitt Group representative to understand the full scope of your responsibility when it comes to this and all other compliance requirements. Leavitt Group Employee Benefits Compliance Department is here to help.

Originally published by Zywave, a Leavitt Group partner for compliance. Republished with permission. Some content by Leavitt Group.