Submission Grace Period Issued for Prescription Drug Reporting

The transparency provisions of the No Surprises Act require group health plans and health insurance issuers to report information on prescription drugs and health care spending to The Departments of Labor, Health and Human Services, and the Treasury (collectively, the Departments). This reporting process is referred to as the “prescription drug data collection” (or “RxDC report”), and it must be submitted by Dec. 27, 2022.

Submission Grace Period

The Departments understood many plans and carriers faced significant operational challenges in complying with the reporting requirements, including arranging and coordinating a plan’s submission across multiple reporting entities. The Departments also noted they were extending the deadline to allow filers to accurately classify, compile, and validate required submission data. 

Many interested parties also had expressed fears that the new and complex reporting requirements would inevitably lead to errors and other failures despite good faith efforts to comply.  So on Dec. 23, 2022, the Departments released an FAQ stating that, for the 2020 and 2021 data submissions due by Dec. 27, 2022, they will not take enforcement action with respect to any plan or issuer that uses a good faith, reasonable interpretation of the regulations and the RxDC reporting instructions in making its submission.

The Departments are providing a submission grace period through Jan. 31, 2023, if plans make a good faith data submission on or before that date.

In addition, to facilitate compliant submissions, the Departments clarified and simplified the reporting requirements, which are outlined in the FAQ for 2020 and 2021 data to allow:

• Multiple submissions by the same reporting entity; thus, a reporting entity submitting for more than one plan or carrier may create more than one submission for a reference year, instead of including the data of all clients within a single set of lists and files for the year.
• More than one reporting entity to submit the same data file type on behalf of the same plan or carrier, instead of having to consolidate all of the plan’s or carrier’s data into a single data file for each type of data.
• A reporting entity submitting the required data, within each state and market segment, to aggregate at a less granular level than that used by the reporting entity that is submitting the total annual spending data as would have been required under final rules.

The Departments also stated that reporting entities may, but will not be required to, include national drug codes for vaccines in their data files. Further, reporting entities will not have to report a value for amounts not applied to the deductible or out-of-pocket maximum or prescription amounts not applied to the deductible or out-of-pocket maximum. The FAQ notes that a reporting entity should not remove these columns from data files but rather may leave the data fields in these columns blank.

Employer Compliance Steps

The immediate relief is welcome, albeit late, but plans should still be vigilant in working to ensure their RxDC requirements are met by no later than January 31, if not already submitted. Most employers will rely on their carriers, TPAs or other third parties to report prescription drug costs by the deadline.

Employers should update their written agreements with these parties to reflect that responsibility and confirm they will timely submit the reports. The Departments also noted that further relief would be announced, as they deem necessary, prior to the next filing deadline.

Submission Deadlines

Dec. 27, 2022
The RxDC report was initially required to be submitted by Dec. 27, 2021, and by June 1 of each year thereafter. However, in interim final rules, the Departments deferred enforcement of these deadlines to Dec. 27, 2022.

Jan. 31, 2023
The Departments will not initiate enforcement action against a plan or issuer that makes a good faith effort to submit the required information by this date.