The Consolidated Appropriations Act-21 (CAA) included a provision that requires group health plans (plans) and health insurance companies (issuers) to report prescription drug benefits, drug costs, and healthcare spending. Under the CAA, plans and issuers are required to submit to the United States Departments of Labor, Health and Human Services, and Treasury (the Departments) a broad array of information, such as a list of frequently dispensed prescription drugs paid under the plan, the costliest prescription drugs covered by the plan, and prescription drugs with the greatest increase in plan expenditures over the preceding plan year. Additionally, plans and issuers must also report to the Departments total spending and costs for various services and items and total premiums broken down by participant and employer payments, among other data. The deadline is quickly approaching. The last day to submit data for the 2020 and 2021 reference years is December 27, 2022, and deadlines will occur annually thereafter.
The Departments have issued a series of FAQs as well as instructions on how to submit this information. However, due to the detail involved in this reporting, most plans are not in possession of this information. In addition, coordinating such information between pharmacy benefit managers, other carve-out service providers, and issuers will make completion of this reporting obligation prior to the deadline quite complex.
Winston Takeway - Plan sponsors should contact their service providers to confirm their assistance in reporting this information to the Departments. Recently issued CMS FAQs indicate that plan sponsors can delegate CAA reporting to their vendors, and reporting does not need to be consolidated with one entity. Note that self-funded plans will still retain liability for reporting, but in the case of fully insured plans, liability can be delegated to issuers in writing. Also, if you changed service providers since 2020, you will need to contact your prior service providers and solicit their assistance. Please contact your Winston & Strawn attorneys for more information.
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