CAA Pharmacy Rx Data Collection (RxDC) Compliance Requirements due by 6/1


The Consolidated Appropriations Act (CAA) of 2021 introduced a web of transparency-related regulations and compliance items for health plans, insurance issuers, agents, and providers – all intending to improve clarity and accountability in health care.
The CAA prioritizes transparency in health care by requiring annual reports from plans and insurance issuers on prescription drug costs and overall spending. This Rx Data Collection (RxDC) empowers the Centers for Medicare & Medicaid Services (CMS) to create reports for Congress and government agencies: Department of Labor (DOL), Health and Human Services (HHS), etc., offering insights to drug trends, rebates, and health care pricing.
While the focus of this column is for health plans in the fully insured group market, these requirements also apply to employers’ self-funded plans, Individual and Family Plan (IFP) market plans, student plans, etc. There is no group size requirement for compliance; virtually all health plans are subject to these new rules. The requirement even applies to church plans and Federal Employees Health Benefits (FEHB), which are normally exempted from many standard health plan compliance obligations under ERISA.
Employers with fully insured group plans have very little – if anything – to do for this compliance requirement. The health insurance carrier will usually handle the reporting since it has access to the necessary information. However, many carriers are involving employers in a verification process by requesting them to complete short surveys to confirm the accuracy of the data. This helps ensure the information is correct before its finalized. Employers that do not respond to their carriers’ surveys may have to create and file the P2 Plan File and D1 Data File on their own, usually with input from legal counsel.

Word & Brown has polled its medical carrier partners to gain clarity on how they are complying with this requirement, including how to obtain written documentation about compliance. Refer to this reference in the W&B Newsroom

CAA’s Pharmacy Data Collection (RxDC) Reporting Requirements
Plans must report required plan and prescription drug data on several files by June 1st annually. Reports are facilitated on a calendar year (“reference year”) basis; they are due six months after the conclusion of each calendar year. The reports detailing activity for calendar year 2023 are due by 6/1/2024.
The law requires insurance plans/issuers to produce the required data and reports, but also bestows a duty onto the employer to make sure the reporting is facilitated. Most carriers are sending communications to employers to document their actions for compliance. 
For the self-funded market, the requirement falls onto the health plan and its administrator (the employer itself) – which will work with its Third-Party Administrator (TPA), Pharmacy Benefit Manager (PBM), and/or Administrative Services Only (ASO) partners to facilitate reporting.
Following is a list of the reports due each year for CAA Rx Data Collection. Fully insured carriers will be creating these reports for their employers; however, the employer’s input may be required before the carrier can complete the D1 file. If employers do not respond to their carriers’ requests for information, the employers may have to create and file the P2 and D1 files themselves – usually in consultation with a benefits attorney.  
  • P2 File – This plan file lists the carrier’s identifying information and the employer’s identifying information. It includes the plan name, plan sponsor, Employer Identification Number (EIN), insurance issuer, etc. It also lists the plan year effective date, the state(s) in which the coverage is available, and the number of members (employees, dependents, COBRA beneficiaries, and retiree participants, as applicable) covered by the plan on the last day of the reference year (December 31st annually). Health insurance carriers/issuers will aggregate all their employer plans’ data by policyholders, by market segment, and state(s) on their P2 Files. Because of this aggregation (and other HIPAA items), employers with fully insured plans will not have access to these files. Side note: Individual plans file similar information on a “P1 File” and Federal Employee Health Benefit (FEHB) plans file similar information on a “P3 File.” 
  • D1 File – This data file lists aggregate premium amounts and life-years. This file lists the gross premiums for the plans, including the employers’ and the employees’ contributory portions of premiums. Fully insured carriers may reach out to employers to confirm their contribution amounts, or they may simply report the contribution amount listed on the master application/group contract with the employer. Refer to the W&B carrier resource to understand what each fully insured carrier is doing to facilitate this reporting requirement. 
  • D2 File – This data file lists spending on health care expenses. This file lists total health care spending for the plan, broken into categories of health care costs. These costs include hospital costs, health care provider, and clinical services costs (separate reports must be created for primary care and specialists), costs for prescription drugs, and other medical costs such as wellness services, etc. Insurance issuers produce these reports on an aggregate basis, correlated with the P2 filing information.
  • D3 File – This data file lists the top 50 most-frequently dispensed brand name drugs for the reference year. Fully insured plans will produce this on an aggregate basis, organized by both state and market segment (IFP, Small Group, Large Group).
  • D4 File – This data file lists the top 50 most-costly drugs (according to the number of paid claims for prescriptions during the corresponding calendar year). Fully insured plans will produce this on an aggregate basis, by state and market segment (IFP, Small Group, Large Group).
  • D5 File – This data file lists the top 50 drugs by spending increase. This is based on the calendar year preceding the reporting/reference year. Fully insured plans will produce this on an aggregate basis, by state and market segment (IFP, Small Group, Large Group). 
  • D6 File – This data file lists Rx totals. Fully insured plans will produce this on an aggregate basis, by state and market segment (IFP, Small Group, Large Group). The data reported includes total annual spending by the plan, total annual spending by enrolled participants, the number of participants with a paid Rx drug claim, the dosage of Rx drug units dispensed, and the total number of paid claims.
  • D7 File – This data file lists Rx rebates by therapeutic class. Fully insured plans will produce this on an aggregate basis, by state and market segment (IFP, Small Group, Large Group). This lists total prescription drug rebates, fees, etc., sorted by drug therapeutic class. 
  • D8 File – This data file lists Rx rebates for the top 25 drugs with the highest amount of drug rebates or price concessions for the reporting year. Fully insured plans will produce this on an aggregate basis, by state and market segment (IFP, Small Group, Large Group).
  • Narrative Response Files – These files are to be completed as applicable (using Microsoft Word or PDF), corresponding to any of the eight data files. These describe any impact of prescription drug rebates on premium and cost sharing and other pertinent Rx drug reporting information. Some data files may require additional context with file submissions, which are detailed in length in the CMS’s Prescription Drug Data Collection (RxDC) Reporting Instructions guide. These narrative response files can describe how the plan accounted for net payments from federal or state reinsurance and cost sharing reduction programs as applicable, etc. Unlike P Files and D Files, there is not a template for filing narrative response files.
Health insurance plans and issuers will submit this information to CMS using its Health Insurance and Oversight System (HIOS). Self-insured plans and their TPAs will submit their reporting data using the same system. Like most electronic filing systems for such information, registration is required and can take a few weeks to complete. Employers with fully insured plans will not have to register or submit information unless their insurance carrier does not facilitate for them.
While CMS is the receiving entity for these Plan Files and Data Files, enforcement for compliance falls upon the DOL and HHS. Non-compliance penalties of $100/day may be issued by the Internal Revenue Service (IRS) for health plans that do not comply as required.

Health insurance brokers do not have any direct responsibility for compliance with this law; however many are informing their employer clients about this information as it is being reported, and as updates from carriers regarding compliance are sent to employer clients.
For additional information, refer to the CMS’s CAA RxDC online resource.

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