New Rule Requires Reporting of Medical and Prescription Drug Costs
December 1, 2021
On November 17, 2021, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) released an interim final rule requiring health plans and issuers to submit information to the Departments regarding certain prescription drug and health care spending.
This rule was issued as a result of the Consolidated Appropriations Act, 2021, (CAA) signed into law in late 2020. The rule complements several rules issued earlier in 2021 to implement other provisions of the CAA.
Overview of the Interim Final Rule
This rule requires plans and issuers in the group and individual markets to submit certain information on prescription drug and other health care spending to the Departments annually, including:
- General information regarding the plan or coverage;
- Enrollment and premium information, including average monthly premiums paid by employees versus employers;
- Total healthcare spending by type of cost (hospital care; primary care; specialty care; prescription drugs; and other medical costs, including wellness services), including prescription drug spending by enrollees in contrast to employers and issuers;
- The 50 most frequently dispensed brand prescription drugs;
- The 50 costliest prescription drugs by total annual spending;
- The 50 prescription drugs with the greatest increase in plan or coverage expenditures from the previous year;
- Prescription drug rebates, fees and other remuneration paid by drug manufacturers to the plan or issuer in each therapeutic class of drugs, as well as for each of the 25 drugs that yielded the highest amount of rebates; and
- The impact of prescription drug rebates, fees and other remuneration on premiums and out-of-pocket costs.
The Departments will issue biennial public reports on prescription drug pricing trends and the impact of prescription drug costs on premiums and out-of-pocket costs starting in 2023. These reports are expected to enhance transparency and shed light on how prescription drugs contribute to the growth of health care spending and the cost of health coverage.
Per the CAA, plans and issuers are generally required to begin reporting by December 27, 2021, and to submit information by June 1 of each year thereafter. However, the Departments delayed the reporting requirement for 2020 and 2021 information until December 27, 2022. Therefore, plans and issuers must submit the required information for both 2020 and 2021 by December 27, 2022. It is anticipated that the 2022 information will be due on June 1, 2023.
The above information does not constitute advice. Always contact your employee benefits broker or trusted adviser for insurance-related questions..
Holly leads Hylant’s ongoing efforts to provide our clients with compliance consulting services on new developments as well as ongoing requirements affecting health and welfare plans. She possesses a deep understanding of federal and state regulations pertaining to employee benefit plans, as well as extensive experience in group benefit plan operation.