New RxDC Reporting Instructions: Good/Bad News Ahead of June 1 Deadline 

Apr 13 2023

As June 1 looms for group health plans and insurers to report medical and pharmacy data for the 2022 reference year to CMS, employers may find the recently-released prescription drug data collection (RxDC) instructions a mixed bag. CMS has clarified processes and templates, better defined key terms, and continued some of the flexibility available for the first RxDC reporting cycle. However, important relief provided in the first reporting cycle has not been renewed, including the much-needed general good faith effort relief issued in FAQs Part 56. As a result, more plan sponsors may need to submit some amount of 2022 data directly to CMS (rather than relying entirely on their vendors).

For a refresher on the RxDC requirement and the relief that was granted for the first submissions due Dec. 27, 2022, see this GRIST and blog.

Some important relief carried forward to second RxDC submission

The new instructions continue several key flexibilities, including:

  • Vendor coordination not required. Multiple vendors may submit the same data file type (e.g., D1) on behalf of the same plan or issuer, eliminating the need for plans to combine the data of multiple service providers into one file. This relief is available whenever vendors are “unwilling or unable to work together,” and allows the multiple vendors that may service a self-funded plan (i.e., TPA, PBM, and other point solutions such as behavioral health carve outs) to submit data to CMS directly.
  • Aggregation rule suspended. Data submitted in files D1 and D3 through D8 may be submitted at the plan or aggregate level regardless of how the D2 file is submitted.
  • Multiple submissions per reporting entity allowed. A reporting entity can make multiple submissions so long as the content of the submissions is mutually exclusive. This relief may help an employer that sponsors multiple plans within a controlled group and wants to submit a separate report for some plans. 

Relief omitted in new instructions

  • No general good faith relief. Although stakeholders have requested much-needed good faith relief for the June 1 reports, noting the delayed instructions and the complexity of this reporting, the new instructions do not provide for any type of good faith relief. Such relief would be welcome, since the new instructions revise key definitions without providing sufficient time for implementation. In particular, more detailed instructions on how to calculate the premium equivalent and average monthly premium paid by members and employers for the D1 file may present challenges because many carriers and TPAs required plan sponsors to provide this information via surveys well before CMS released its instructions.
  • No specific good faith relief for average monthly premium paid by members and employers. The  instructions for the first RxDC submissions provided nonenforcement relief for average monthly premiums paid by employers and members in the D1 file. To date, no similar relief has been granted for the second cycle, despite ongoing confusion about how to obtain and report this data.
  • Email option eliminated. Entities submitting P2/D1 files only can no longer use email, but instead must submit data through the Health Insurance Oversight System (HIOS).
  • Additional data elements to report. Medical and pharmacy expenses not applied to the deductible or out-of-pocket maximum must now be reported on the D2 and D6 files. The P2 file also has a new field to identify carve-out vendors, but that field is not required for the June 1, 2023 submission.
  • No submission grace period. Currently, there is no provision for an additional submission grace period akin to the Jan. 31, 2023 grace period provided for the first submission.

More employers may need to submit data directly to CMS

Generally, employers should be able to build on the work they did for the first submission: identifying vendors with the required data and confirming the reporting entities for every data file. Many employers should find that they can rely upon their vendors’ to complete the RxDC submissions on behalf of their plans.

But in the absence of general good faith relief, some employers will need to submit some or all D1 data directly to CMS for their self-funded plans. (There are limited circumstances where an employer would need to submit D1 data for their insured plans as well.). Some examples of when an employer may need to submit a P2 and D1 file include:

  • The employer’s plan vendors aren’t willing to submit a D1 on the employer’s behalf.
  • The medical TPA will submit a D1 on the employer’s behalf, but won’t include premium information attributable to benefits administered by other vendors (for example, pharmacy benefits administered by a PBM). Unless the carve-out (or point solution) vendor is willing to submit a D1, the employer may have to report some D1 information directly to CMS.
  • The self-funded plan has paid for stop-loss coverage, but the employer’s plan vendors aren’t willing to report information about the premiums for such coverage.

Bottom line

The landscape is still evolving. CMS is holding live Q&A webinars every Wednesday through the end of May. But given the rapidly approaching June 1 deadline, employers facing the prospect of a first-time RxDC submission should establish a HIOS account now and prepare for the submission.

Related Insights
Related Case Studies