RxDC Reporting Breakdown: Where Do We Go from Here?
Introduced by the Consolidated Appropriations Act (CAA) of 2021, the goal of the Prescription Drug and Health Care Spending Reporting (RxDC) is to provide the U.S. government, as well as employers and consumers, with detailed insights into how prescription drug spending impacts the overall costs of health insurance. This includes gathering data on prescription drug expenditures by health insurers and employer-sponsored health plans, with a special focus on high-cost drugs, plan structures, and rebates. Section 204 of the CAA mandates that health insurers and group health plans report detailed prescription drug and healthcare spending information to the Centers for Medicare & Medicaid Services (CMS) by June 1 every year. This includes both the total amount spent on prescription drugs and any financial arrangements (such as rebates or discounts) that affect the cost.
Why Is RxDC Important?
The primary purpose of RxDC reporting is to improve transparency in how prescription drug costs are managed and passed down to consumers. The rising costs of prescription drugs have been a significant driver of healthcare expenses in the U.S. year-over-year, and the RxDC initiative aims to shed light on the complexities of drug pricing, rebates, and plan benefits.
By providing regulators with data on the cost of drugs and the financial arrangements involved, the government can better understand trends in prescription drug pricing and identify areas where costs may be artificially inflated or where efficiencies could be made.
Targeting PBMs Crucial to the mission of RxDC is preventing Pharmacy Benefit Managers (PBMs) from hiding the amount of rebate money they’re keeping from employer groups. For self-funded benefit plans, this would mean greater transparency and more money left in employers’ pockets—a win-win, right? In theory yes…but full compliance with the RxDC requirements necessitates corporation between all stakeholders. To that end, according to a report in March edition of The Self-Insurer*, coordinating RxDC efforts for Third-Party Administrators, PBMs, brokers, and health plan sponsors has been an immense undertaking that has been anything less than smooth. Further, it seems that a lot of PBMs are doing their best to take advantage of a loophole in the law that would allow them to continue concealing data.
While many PBMs claim that they’re completing the proper files for their employer group clients, “they’re not completing the pieces they don’t have the data for, which means that those groups are not I compliance with the regulations,” said Lauren Wells in the Self-Insurer piece*. Ms. Wells is a practice leader for Healthcare Reporting. Where Do we Go from Here? Lack or coordination and incomplete data for self-funded plans runs completely counter to the primary
goal of RxDC—greater transparency that can allow for better, more cost-effective coverage decisions to be made.
So, what’s the answer?
If only it were that easy to solve—but, at the very least, CMS needs to amend the reporting instructions to make the filing process far less complicated. As it stands now, there are way too many cooks in the kitchen and far too many opportunities for things to go wrong—whether that’s intentionally withheld data or something that just falls through the cracks or gets lost in the overly complex process. While there is still no official penalty non-compliance with RxDC—beyond the standard ERISA penalty—having a clear, simple RxDC process on the books where successful completion is easily obtained should not be too tall of an ask. After all, these regulations only stand to HELP health plans and their members.
What are your thoughts on RxDC and the current reporting and submission process? Let us know in the comments!
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