The No Surprises Act (NSA), enacted as part of the Consolidated Appropriations Act, 2021 (CAA), includes transparency provisions requiring group health plans to report information on prescription drugs and health care spending to the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments). This requirement applies to group health plans and health insurance issuers in the individual and group markets but does not apply to account-based plans and excepted benefits.

This reporting process is referred to as the “prescription drug data collection” (or “RxDC report”). The RxDC report is due by Saturday, June 1, 2024 covering data for the 2023 calendar year.

Most employers contract with third parties, such as issuers, third-party administrators (TPAs) and pharmacy benefit managers (PBMs), to submit RxDC reports on behalf of their health plans. Employers may work with multiple third parties to complete the RxDC report for their health plans. For example, a self-insured employer may use both its TPA and PBM to submit different portions of the RxDC report. A health plan’s submission is considered complete if CMS receives all required files, regardless of who submits them. Group health plans are not prohibited from reporting the required information on their own, but the Departments expect this to be rare.

Links and Resources

  • HHS’ RxDC website (includes RxDC reporting instructions, FAQ’s, templates, and HIOS instructions).

Reporting Requirement

  • Plans and issuers are required to annually report certain information about pharmacy benefits and drug costs.
  • Most employers will rely on their issuers, TPAs or PBMs, as applicable, to prepare and submit the RxDC reports on their behalf.
  • RxDC reports are due by June 1 of each year, covering data for the previous calendar year.

Reporting on Pharmacy Benefits and Drug Costs

The NSA requires group health plans and health insurance issuers offering coverage in the group and individual markets to report certain information on plan medical costs and prescription drug spending to the Departments. Specifically, plans must report the following:

  • General information on the plan or coverage, such as the beginning and end dates of the plan year, the number of participants, beneficiaries or enrollees (as applicable), and each state in which the plan or coverage is offered;
  • The 50 brand prescription drugs most frequently dispensed by pharmacies for claims paid by the plan and the total number of paid claims for each drug;
  • The 50 most costly prescription drugs with respect to the plan by total annual spending and the annual amount spent by the plan for each drug;
  • The 50 prescription drugs with the greatest increase in plan expenditures over the prior plan year and, for each drug, the change in amounts expended by the plan in each plan year;
  • Total spending on health care services by the group health plan, broken down by the type of costs; the average monthly premium paid by employers (as applicable) and by enrollees; and any impact on premiums by rebates, fees and any other remuneration paid by drug manufacturers to the plan; and
  • Any reduction in premiums and out-of-pocket costs associated with rebates, fees or other remuneration.

According to the Departments, this data will help them identify major drivers of prescription drug and health care spending, understand how drug rebates impact premiums and out-of-pocket costs, and promote transparency in prescription drug pricing.

Reporting Entities

This reporting requirement applies to both grandfathered and non-grandfathered group health plans and health insurance issuers in the individual and group markets. However, it does not apply to account-based plans (such as health reimbursement arrangements) and excepted benefits.

  • If the issuer of a fully-insured group health plan is required by written agreement to report the required information but fails to do so, then the issuer—not the plan—violates the reporting requirements.
  • If a self-funded group health plan requires another party (such as a PBM, a TPA or other third party) to report the required information by written agreement but the third party fails to do so, then the plan or issuer violates the reporting requirements. Thus, employers with self-funded plans should monitor their TPA’s or PBM’s compliance with the RxDC reporting. Unlike fully insured plans, the legal responsibility for RxDC reporting stays with a self-insured plan even if its TPA or PBM agrees to provide the report on its behalf. 

Action Steps

  • Employers should be on the lookout for emails from their issuers, TPAs or PBMs, as applicable, to confirm that they will submit the RxDC reports on their behalf for their health plans. The email will contain instructions for submitting the necessary information for the P2 and D1 file submissions. In most cases, the issuer, TPA, or PBM will submit all the necessary files as long as the details are received by the date requested.
  • Employers should also confirm that their written agreements with these third parties address this reporting responsibility.
  • Employers with self-funded plans should monitor their TPA’s or PBM’s compliance.

This Compliance Overview is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2022-2024 Zywave, Inc. All rights reserved.