The departments of Health and Human Services, Labor and Treasury have released an interim final rule with request for comments (IFC) titled “Prescription Drug and Health Care Spending.” Under the transparency provisions of the Consolidated Appropriations Act, 2021 (CAA), group health plans and health insurance issuers must report to the departments certain information about prescription drug and healthcare spending. The departments will use that information to issue public reports every two years on prescription drug pricing trends and the impact prescription drug costs have on premiums and out-of-pocket costs, starting in 2023.
Group health plans and issuers must start submitting information to the departments beginning December 27, 2021, and by June 1 each year thereafter (i.e., calendar year 2021 information by June 1, 2022; calendar year 2022 information by June 1, 2023; and so on); however, the departments are temporarily deferring enforcement of those deadlines. A group health plan or issuer that submits the required information for 2020 and 2021 by December 27, 2022, will not be penalized.
Comments on the IFC are due by January 24, 2022.
For purposes of the IFC, “group health plans” include ERISA group health plans (fully insured and self-insured), non-federal governmental plans (e.g., plans sponsored by states and local governments) subject to the Public Health Service Act, church plans and Affordable Care Act grandfathered plans. Not subject to the rules are account-based plans (e.g., health reimbursement accounts [including individual coverage health reimbursement arrangements], health flexible spending accounts and health savings accounts); plans that qualify as “excepted benefits”; and short-term, limited-duration insurance. For the IFC, “individual health insurance coverage” includes coverage offered in the individual market, through or outside of an exchange, as well as student health insurance coverage.
To increase flexibility and reduce administrative burdens, the IFC states third parties — such as issuers, third-party administrators (TPAs) and pharmacy benefit managers (PBMs) — may submit some or all the required information on behalf of a plan or issuer, provided a written agreement is in effect. Group health plans are not prohibited from reporting on their own, but most are expected to report through third parties. The rules also state that for fully insured plans, the responsibility for a failure to comply is on the issuer, while for self-insured plans, it is on the group health plan sponsor (whether using a third party or not).
The IFC requires that group health plans and issuers provide the following information:
Group health plans and issuers generally will be required to submit much of the information aggregated at the state/market level rather than separately for each plan.
Reporting entities will be able to submit the required data through an internet portal. More technical detail on each data element will be provided in the collection system instructions. The system will allow multiple reporting entities to submit different subsets of the required information on behalf of the same group health plan or issuer.
Employers must decide whether to gather and submit these reports for their group health plans themselves or have their TPAs, insurers, PBMs or other entities submit the information: