Prescription Drug Data Collection (RxDC) 2022 Reporting Instructions Released

Compliance, Employee Benefits

On March 27, 2023, the Centers for Medicare and Medicaid Services (CMS) released the Prescription Drug Data Collection (RxDC) Reporting Instructions for the 2022 calendar year. Additionally, CMS released new file templates along with updated instructions for accessing and using the Health Insurance Oversight System (HIOS).

RxDC reporting is an effort on the part of CMS to better understand prescription drug costs. The deadline to submit the 2022 RxDC reporting information is June 1, 2023. This is the second time RxDC reporting has been required, with reporting for 2020-2021 reported in January 2023.

In many cases, health insurance carriers handle these reporting requirements for employers that sponsor fully insured health plans. However, employers that sponsor self-funded health plans may want to review these changes, especially if their Third Party Administrator (TPA) and, if applicable, Prescription Drug Benefit Manager (PBM) require the employer/plan sponsor to file or provide some of the required information. The changes to the RxDC Reporting Instructions, file templates, and HIOS instructions are highlighted below.

Changes to 2022 Prescription Drug Data Collection Reporting Instructions

Submission of Same Data File(s) by Different Entities

The main component of RxDC reporting is providing data files to CMS. There are eight data files, D1-D8, which each contain different required reporting elements on healthcare and prescription drug spending.

The instructions for 2022 reporting clarify that more than one entity can submit the same data file, as long as each entity is reporting different information. Multiple entities should not report the same data to prevent double reporting. This means each entity should submit information the other entity is not.

This change is particularly beneficial to employers, who as plan sponsors, must submit information that their insurance carrier or third party administrator is not. For example, an employer and an insurance carrier could both submit a D1 file as long each entity is reporting different information. The employer’s D1 should not contain the data the insurance carrier’s D1 does.

Updated P2 Group Health Plan List File Template

Every data file submission requires the submission of an accompanying plan list file to identify the specific plan the data files are tied to. There are three types of plan list files —P1-Individual and Student Market, P2-Group Health Plan, or P3-FEHB—that are used to identify which plan the data files are reporting information for. The majority of employers, as group health plan sponsors, will use P2 when completing RxDC reporting.

For example, if an employer had to submit a D1 file they would need to submit a P2 file as well. If an employer had to submit both a D1 and D2 file, they would need to submit an accompanying P2 file.

Group Health Plan Number

P2 requires the reporting of a group health plan number and the updated instructions provide a more detailed explanation of what a group health plan number is. Employers, as group health plan sponsors, are free to create their own group health plan numbers and “may use numbers, letters, or punctuation marks (except for slashes).” Employers may also use the a plan number from an accounting system, a Form 5500 plan number, or plan sponsor EIN may also be used.

If multiple entities are submitting information about the same plan, each entity is encouraged to use the same group health plan number.

Carve-Out Description Added

Replacing the “HIOS Plan ID” in column C of file P2 is “Carve Out Description.” This column now collects information about carve-out benefits when multiple entities are reporting information about the same plan. A benefit carve-out is a benefit administered, offered, or insured by an entity that is different than the entity that administers, offers, or insures the majority of the plan’s other benefits.

For example, an entity reporting only prescription drug information could write “prescription drug benefit carve-out” in the description column.

Information in this field is not mandatory for 2022 reporting. This field should be left blank if an entity is reporting all information about a plan.

Column Name Changes

Several of the column names in the data and plan files have been updated. These name changes are meant to provide clarity and do not change the information that is reported in the column.

The new data file and plan file templates for 2022 RxDC reporting can be downloaded through this link.

Update Directions for Clarity

The updated directions contain numerous changes to make the directions clearer and easier to follow. For example, the directions for completing data file D1 have been updated to better explain the information being requested and how to perform certain calculations.

Updated HIOS Resources

Entities that must directly submit all or part of the RxDC reporting information themselves must create Health Insurance Oversight System (HIOS) accounts. Along with the updated instructions, CMS published updated information on accessing and using HIOS.

The HIOS Portal RxDC Quick Reference Guide walks step by step through the process of creating a HIOS account. If an entity already has an HIOS account, they do not need to follow the procedures set forth in this guide.

Once an entity has a HIOS account, they can use the RxDC HIOS Module User Manual to walk through the process of submitting the RxDC reporting information in HIOS.

Key Takeaway:

Employers that sponsor a group health plan would be well served to review the status of their RxDC reporting. It is important to understand if your insurance carrier or TPA is completing all or some of the RxDC reporting on your behalf. In the event that your carrier or TPA is not submitting all of the required RxDC reporting, you should review the requirements to ensure that you accurately report any information that your carrier or TPA is not.

Plan sponsors of fully insured plans should confirm whether the carrier will complete all the required reporting or if the plan sponsor will be required to submit any information.

The information provided is a summary of laws and regulations relating to employee benefit plan compliance. This information should not be construed as legal advice. In all cases, employers should consult with their own legal counsel.

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