Agencies issue prescription drug reporting relief for 2020 and 2021 

December 27, 2022

Late last week, regulators issued much-needed guidance providing good faith compliance relief, a grace period for filing until Jan. 31, 2023, a number of clarifications, and added flexibilities for group health plans and issuers subject to new prescription drug data collection (“RxDC”) requirements under the Consolidated Appropriations Act of 2021 (“CAA”). Plan sponsors have been racing to comply amidst numerous challenges, complexities, and open questions for the first submissions for 2020 and 2021 that were both due Dec. 27, 2022. The guidance is limited to the submissions for the 2020 and 2021 reference years; regulators will continue to monitor compliance efforts to determine if additional guidance is needed prior to future submission deadlines and expect that plans and issuers will work in good faith toward full compliance in the future. The next deadline is June 1, 2023 for the 2022 reference year.


Good faith compliance relief with a grace period

Acknowledging the significant challenges that group health plans and issuers are encountering in complying with the RxDC requirements, regulators will not take enforcement action against any plan or issuer that uses a good faith, reasonable interpretation of the interim final regulations and the RxDC Reporting Instructions in making the 2020 and 2021 data submissions. The Departments are also providing a submission grace period through Jan. 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.


New simplified filing method provided

If a group health plan or its reporting entity is submitting only the plan list (P2), premium and life-years data (D1) and a narrative response, it may submit files by email to instead of using the Health Insurance Oversight System (HIOS). According to the guidance, the emailed submission:

  • Must include the plan list file (P2), premium and life-years data (D1), and a narrative response.
  • May include optional supplemental documents.
  • The name of each file should include the reference year of the submission, the plan list or the data file type (e.g., P2, D1), and the name of the plan sponsor.

We encourage employers to discuss the simplified submission with legal counsel, as we are aware of employers who were planning to file various pieces of the RxDC submission but not exactly what the guidance requires.


Aggregation rule suspended

A reporting entity may, within each state and market segment, aggregate data at a less granular level than that used for total annual spending on health care services in the D2 file. In other words, data submitted in files D1 and D3 through D8 may be submitted at the plan or aggregate level regardless of how the D2 file, which reports all healthcare spending other than the pharmacy benefits, is submitted.

The instructions state that if the D2 file is submitted at the plan level then data submitted in files D1 and D3 through D8 may not be aggregated but must be submitted at the plan level. Plans should prepare to comply with the aggregation rule for future submissions.


Additional guidance

  • Clarifies that when a reporting entity submits on behalf of more than one plan for a reference year, they may create more than one submission, instead of including all client data within a single set of plan lists and data files. This could be welcome relief for employers looking to submit on behalf of other plan sponsors in their IRS controlled groups.
  • Confirms that more than one reporting entity may submit the same data file type (e.g., D1) on behalf of the same plan or issuer, instead of consolidating all of the plan’s or issuer’s data into a single data file for each type of data.
  • Provides that reporting entities may, but are not required to, incorporate vaccine National Drug Codes (NDCs) as part of the CMS drug and therapeutic class crosswalk. The crosswalk was just updated on Oct. 3, 2022 to include vaccines.
  • Reporting entities do not have to report a value for “Amounts not applied to the deductible or out-of-pocket maximum” and the “Rx Amounts not applied to the deductible or out-of- pocket maximum.” A reporting entity should not remove these columns from data files D2 and D6 but may leave blank the data fields in these columns.

Mercer and other employer stakeholders raised open issues about the complexities of the RxDC submissions and expressed the need for good faith compliance relief. We believe this relief will be helpful to the many employers that sponsor group health plans who are subject to these requirements. We hope the regulators will release revised draft instructions for public comment early in 2023, so that the employer community can provide comments and prepare for the 2022 submission due in June, 2023. 

Steven Schinderle
Melissa Travis
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