The healthcare industry is facing yet another wave of regulation updates, particularly focusing on prescription drugs and healthcare spending. The latest comes under the Consolidated Appropriations Act, 2021 (CAA), highlighting the annual requirement for group health plans and health insurers to report specified data related to prescription drugs, known as the prescription drug data collection (RxDC). With the deadline for the 2023 reference year report looming on June 3, 2024, it’s crucial for stakeholders to grasp the implications of these updates and prepare accordingly.
The Essence of RxDC Reporting
The RxDC reporting mandate is not just another bureaucratic hoop to jump through. It’s a structured effort to bring transparency and accountability to prescription drug spending in the healthcare sector. This initiative requires detailed reporting from group health plans and health insurers on the costs associated with prescription drugs, among other healthcare expenses. Typically, entities such as carriers, third-party administrators, or pharmacy benefit managers undertake this reporting on behalf of plan sponsors. This often involves gathering additional information from employers to complete the reporting accurately and comprehensively.
Key Updates for 2023
The Centers for Medicare and Medicaid Services (CMS) has released instructions for the 2023 reference year, incorporating several significant updates. These include:
- Exclusion of Certain Products: Clarification has been provided on excluding medical devices, nutritional supplements, and over-the-counter drugs from the prescription drug lists, unless listed on the CMS Drug and Therapeutic Class Crosswalk.
- Simplified Premium Calculation: The method for calculating the average monthly premium has been streamlined. Now, the total annual premium is divided by 12, moving away from the per-member calculation.
- Modified Premium Equivalents Calculation: The process for calculating premium equivalents has been simplified, easing the reporting process by focusing on paid claims rather than incurred claims.
- Updates and Clarifications: Several sections have received updates, including instructions for the benefit carve-out field and details on reporting prior year and restated rebates. Additionally, new guidelines for reporting retained rebates and submitting large data files have been introduced.
- Enforcement of Aggregation Restriction: An important note is the enforcement of the aggregation restriction, which dictates the manner in which data must be aggregated for reporting purposes.
- Addition of Enrollment Column: To further enhance data collection, a new column for collecting enrollment data has been added, signifying the importance of comprehensive data collection.
The Road Ahead
With these updates, the CMS aims to refine and streamline the RxDC reporting process, making it more efficient and less burdensome for those responsible for submitting the data. However, the introduction of new requirements and the enforcement of certain restrictions mean that entities involved in this process must stay vigilant and proactive in their compliance efforts.
For stakeholders in the healthcare industry, particularly those involved in managing or reporting healthcare plan data, staying updated with these changes is crucial. It ensures not only compliance with federal regulations but also contributes to a more transparent and accountable healthcare system.
As the June 3, 2024 deadline approaches, it’s imperative for all involved parties to review these updates thoroughly and prepare their reporting processes accordingly. For more detailed information, visiting the CMS Prescription Drug Data Collection (RxDC) web page recommended.
