Regulators Issue Key Updates on Rx Reporting Requirements | Grace Period Announced

December 27, 2022

On Friday, December 23rd various federal agencies issued a “last-minute” update related to the new federal requirements for group health plans’ Rx reporting. By way of reminder, the 2021 Consolidated Appropriations Act established new transparency requirements for reporting specific information about prescription drugs and health care spending to the federal government. This data submission is called the “RxDC” report. The Rx stands for prescription drug and the DC stands for data collection. The first RxDC report is due by December 27, 2022 and covers data for both the 2020 and 2021 “reference years.” Plans must then submit data for the 2022 reference year by June 1, 2023, and by June 1 annually thereafter. For plans that are fully insured, most of the reporting will be handled by insurers. For plans that are self-funded, more is required. See our Conner Strong & Buckelew legislative update for more details on this requirement.

For more than a year, Conner Strong & Buckelew has been working directly with health insurance carriers, TPAs, PBMs and others to monitor guidance and confirm vendor approaches to assist our clients in remaining compliant with these RxDC requirements. We anticipated additional guidance given the significant operational challenges plans and issuers have encountered in complying with these reporting requirements. So in the spirit of giving, on December 23rd, the agencies issued much-anticipated FAQ enforcement action guidance and information on clarifications and flexibilities related to the RxDC reporting rules:

“For the 2020 and 2021 data submissions that are due by December 27, 2022, the Departments will not take enforcement action with respect to any plan or issuer that uses a good faith, reasonable interpretation of the regulations and the Prescription Drug Data Collection (RxDC) Reporting Instructions in making its submission. The Departments are also providing a submission grace period through January 31, 2023, and will not consider a plan or issuer to be out of compliance with these requirements provided that a good faith submission of 2020 and 2021 data is made on or before that date. In addition, to facilitate the submission process, the Departments are providing … clarifications and flexibilities with respect to reporting requirements (including operational requirements within the Health Insurance Oversight System (HIOS) reporting system) for the 2020 and 2021 data”.

The updated guidance is welcome news and makes clear that employers and plan sponsors making a good faith effort to comply will not be subject to penalty in the event there are issues in the early stages of the new requirements. The extension for initial submissions to January 31, 2023 is also welcome news. Regardless of the latest guidance, employers and plan sponsors are advised to continue to fully comply with the new requirements. We anticipate additional guidance and updates to the reporting instructions in advance of the next reporting due date in June 2023.

We will provide alerts and updates as new information becomes available. Please contact your Conner Strong & Buckelew account representative toll-free at 1-877-861-3220 with any questions. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.