2022 RxDC Reporting Instructions

By: HUB’s EB Compliance Team

HHS recently released revised instructions for group health plans and insurers to report prescription drug and health care spending data for the 2022 calendar year. Reporting for the 2022 calendar year is due on June 1, 2023. The new instructions introduce significant changes and clarifications to the reporting guidelines for the 2020 and 2021 calendar years.

The most notable revisions are as follows:

Nearly all plans must report: The revised instructions clarify that all plans, insured, self-insured, level funded, grandfathered, grandmothered, non-federal plans sponsored by state, cities, and other governmental agencies, including the federal government are required to comply with the RxDC reporting requirements. Reporting requirements also extend to church plans that are subject to the Internal Revenue Code. Reporting must be done for all 50 states, the District of Columbia, and the U.S. territories. Plans and carriers are to make their own determination on whether to include information about prescriptions filled in other countries. RxDC reporting requirements do not extend to plans that are maintained outside of the U.S. for the benefit of non-U.S resident aliens (not a U.S. citizen or U.S. national), or for excepted benefit plans, retiree-only plans, or health reimbursement arrangements (HRAs). A retiree only plan is defined as a medical plan that covers retirees with less than two participants that are active employees.
Multiple vendors can submit data for the same plan: The instructions confirm what had been implied in various CMS Q&A sessions, that more than one reporting entity may submit the same data file on behalf of the same plan or issuer. This is significant, as CMS is acknowledging that many group health plans require multiple reporting entities to submit the same data file on their behalf. In some cases, employers may have changed carriers, TPAs, or PBMS during the reporting year, which require two separate submissions to capture the months the vendor provided services to the plan. In other cases, vendors will only report on certain fields captured in the reporting file, such as in the case of the narrative report. CMS has confirmed that multiple submissions are allowed, however, the reporting entities should use the same plan name and plan number to assist CMS in reconciling multiple submissions for the same entity.
No Enforcement Relief for 2022: The instructions confirm that the relief available for failure to report average monthly premiums paid in 2020/2021 will not extend to 2022 reporting. CMS has not offered any other good faith relief for 2022 reporting at this time. Group health plan sponsors should work with their TPAs, PBMs, and/or medical insurance carriers to confirm who will be the reporting entity and the deadlines that each party will have to meet. Group health plan sponsors that missed the deadlines set by their PBM, TPA and/or insurance carrier should be prepared to submit their RxDC reports to CMS directly by June 1, 2023 to avoid becoming subject to penalties.
HIOS Guidance: The email reporting option that plans could use for calendar years 2020 and 2021 to file P2 and D1 reports with CMS will NOT be available for 2022 RxDC reporting. If a group needs to submit one or more files to CMS, the reporting entity will have to sign up for their own HIOS account and submit reports via the HIOS website. Note that obtaining a HIOS ID can take up to two weeks, therefore group health plan sponsors reporting to CMS should register as soon as possible to ensure they can comply with the reporting requirements on or before June 1, 2023.
P2 File Reporting Clarifications:

States in which the plan is offered: A plan is considered “offered” in a state if a person living or working in that state would be eligible to obtain coverage under the plan. Self-funded plans may enter “National” if a person living or working in any state would be eligible to obtain coverage under the plan.
Plan Year Beginning and End dates: Non-calendar year plans would report the two plan years that fall within the 2022 calendar year.
Members as of 12/31 of the Reference Year: For the member count as of 12/31 of the reporting year, plans should only report the number of covered members as of 12/31/22. A member is defined as an individual covered under the plan, which includes employees, covered dependents, COBRA qualified beneficiaries, and retirees if covered in the same plan as active employees. The table below explains the process non-calendar year plans should follow when completing these data sets of the P2 file:
Issuer Name and Issuer EIN: Insured plans will report the insured medical carrier’s name and EIN. Self-insured plans are to report the stop-loss carrier’s name and EIN. If the plan does not purchase stop-loss coverage (specific or aggregate stop-loss), leave those fields blank.
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D1- Premium and Life Years Clarifications
- Premium Equivalent Calculation Guidance (total plan cost for self-funded coverage): Perhaps the biggest change was made to the premium equivalent calculation instructions for self-funded plans, where the 2020 and 2021 instructions defined this cost to be to COBRA accrual rate minus the 2% administrative fee. However, for the 2022 reporting year, reporting entities are no longer allowed to use the COBRA accrual rate, but rather report total annual costs actually paid for the reference year. The directions instruct reporting entities to include in the calculations:
  - Claims costs; administrative costs, including ASO and other TPA fees; stop-loss premiums; network access fees, such as preferred provider organization (PPO) fees; payments made under capitation contracts with providers for benefits covered under the plan.
  From that amount, the instructions require that reporting entities subtract stop-loss reimbursements and prescription drug rebates received by the group health plan during the reference year, regardless of whether the payment is retrospective or prospective.
  
  In addition, reporting entities should exclude the following:

Mid-Year Vendor Switches: If a plan switched vendors during 2022, the previous vendor may report the data from the period before the change, and the new vendor report the data from the period when the change was effective.

Next Steps for Reporting Entities

The changes included in the 2022 CMS RxDC reporting instructions both simplify and increase the reporting burden for many entities. Groups will need to identify which of these changes, if any, will affect their reporting, including data files that may have already been submitted on a group’s behalf. Groups will need to work with their vendor and carrier partners to ensure the correct information is submitted timely and in full by all parties involved. If a plan sponsor missed the carrier, PBM, or TPA deadline to submit information on RxDC reporting, the plan sponsor should be prepared to submit the information to CMS via the HIOS website, unless the plan sponsor has contracted with a third-party vendor to submit reports on their behalf.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization’s or individual's specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your or your organization’s particular needs.

2022 RxDC Reporting Instructions Released by HHS