Prescription Drug Data Collection Instructions for 2023 Calendar Year Data Released

Compliance, Employee Benefits

On February 2, 2024, the Centers for Medicare & Medicaid Services (CMS) released updated instructions for Prescription Drug Data Collection (RxDC) due June 1, 2024. This round of RxDC is focused on data from the 2023 calendar year.

Changes to the RxDC Reporting Instructions

The RxDC Instructions for the 2023 calendar year contain some changes from the instructions for the 2022 calendar year. Notable changes are discussed below.

Simplified Average Monthly Premium Calculations

Average monthly premium amounts are now determined by dividing the total annual premium paid by members and the total annual premium paid by employers by 12, rather than on a per member per month basis as done in previous years.

Additional Guidance Surrounding “Premium Equivalents” For Self-Funded Plans

Self-funded plans are required to report the total plan cost, also known as premium equivalents. The new instructions provide additional guidance for what costs to include when determining premium equivalents.

Clarified Carved-Out Benefit Instructions

A carved-out benefit 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.”

When reporting information for a carved-out benefit, the entity submitting the data must indicate which type of carved-out benefit the information is from. The instructions provide a list of carved-out benefits that can be reported.

Data Aggregation Requirements

Previously an unenforced requirement, the data submitted in file D1, and files D3 through D8 cannot be aggregated at a less granular level than the data submitted in file D2.

For example, if the data in D2 is aggregated according to the plan sponsor EIN, then data in files D1 and D3 through D8 must be aggregated according to plan sponsor EIN.

If your organization is responsible for submitting any of the required information, you will need to use the RxDC spreadsheet templates which have been updated for the reporting due June 1, 2024.

HIOS Account Required

RxDC information will once again be submitted through the Health Insurance Oversight System (HIOS). Individuals who were required to submit RxDC data themselves in 2024 will be able to use the HIOS account they previously created to submit any required data in 2023.

If you were not required to submit information in HIOS previously, and must in 2024, you will need to create a HIOS account. Be aware that creating your HIOS account can take up to two weeks, so it is advisable to start the process sooner, rather than waiting until just before the June 1st reporting deadline. Instructions for creating a HIOS account are available here.

Once you have created a HIOS account, you can follow the HIOS RxDC User Guide to walk through the process of actually submitting the required information.

If a third party is submitting all the required information on your organization’s behalf, you do not need to create a HIOS account.

Surveys from Third Party Submitters

Third parties such as insurance carriers, TPAs, and PBMs can submit the required data on behalf of an employer. However, these third parties may not have all the information necessary to complete the entire submission. Some third-party submitters may reach out with their own surveys to collect information necessary to make the required submission. It is important that employers respond to any survey in a timely and accurate manner to ensure that the third-party submitter can make a complete and accurate submission on their behalf.

Be aware that not all insurance carriers, TPAs, and PBMs will submit the data on your behalf. Confirm with your carrier, TPA, and/or PBM what they are submitting, and what information you will need to submit yourself, if any.

Key Takeaways:

Employers should verify with their insurance carrier, TPA, and/or PBM that those third parties will make the required RxDC submission on their behalf. If any of those third parties are not submitting the required information, the employer, as the plan sponsor, is responsible for ensuring the necessary information is submitted.

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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