RxDC Reporting Deadline Approaching
March 14, 2025
Another round of prescription drug data collection (RxDC) reporting is just around the corner. Annual reporting is required by June 1 of each year containing data from the previous calendar year (the “reference year”), so reporting for the data from 2024 will be due June 1, 2025. Most employers sponsoring group health plans that provide prescription drug coverage, regardless of size or funding vehicle (fully-insured or self-funded), have some role to play in the RxDC process and should coordinate with their vendors to determine how much of the reporting will be done by the vendor, and what, if anything, the employer needs to do to complete the process. We anticipate that if an employer is making a good faith attempt to comply, the regulatory agencies will continue to be lenient with any enforcement action. We have already started to see letters from vendors requesting information to begin preparing for the reporting over the next couple months, so this article provides a refresher on the RxDC reporting requirements and responsibilities.
| Carrier | RxDC Reporting Process | Supporting Documentation |
|---|---|---|
| Aetna | Aetna has developed a process for our customers to submit the information required in order for the submission to be completed. This requirement applies to all SG products: AFA, 51-100 FI and ACA. Although AFA falls under self-insured, we are handling AFA customers as any other customer and continue to provide them extra support on these requirements. Plan sponsors who had Medical coverage with us at any point during 2024 began to receive an outreach email, requesting information in support of the regulatory filing that is due to CMS on 6/1/2025. The plan sponsor must click on the link in the Aetna Communication email they received, and provide the information required via the electronic form process (the details of the info needed are listed below). The deadline to complete this information is 3/31/2025. New This Year We listened! In response to your feedback from last year's filing submission, we have added a new blank submission form that the broker may fill out to submit on behalf of their plan sponsor. You may use this form to provide the information to Aetna on behalf of your client - click this link to access the online form: Aetna Prescription Drug Data Collection. We can then use the data to submit on behalf of your client. What you need to know: The form is simple….one form for all medical plans the group had in 2024; if the group terminated in 2024, factor the months the group was active with Aetna. Required info: Plan Sponsor Name (as shown on the Master Service Agreement for AFA/Self-Insured or the Group Policy for fully insured) Plan Sponsor ID number (PSUID#) - is on the group's invoice as Account Number Submitter First and Last Name Submitter Email Legal Entity name is: Aetna Life Insurance Company (this info is found on the Master Service Agreement for AFA/Self-Insured or the Group Policy for fully insured) Funding Arrangement: For the AFA product, the funding arrangement is Self-funded. For the 51-100 fully insured and ACA product, the funding arrangement is Fully insured. Total premium paid by Employer Total premium paid by Members If the form is not submitted by the 3/31/25 deadline, Aetna will submit on the group's behalf, but it will be incomplete. Your client would then need to submit the information directly to CMS by 6/1/25. Aetna will not be responsible for any liability associated with the inaccurate report. What you can do: Help your clients gather and report the data so they won't have anything else to worry about. | How to Complete the RxDC Plan Sponsor Data Collection FormHow to Complete the RxDC Plan Sponsor Data Collection Form |
| Aetna International | Pending | |
| AmeriHealth | Pending | |
| Capital Blue Cross | With all the areas that the CAA impacts, Capital has an active landing page that is constantly updated - Consolidated Appropriations Act. | |
| Cigna | To comply with the CAA Section 204 final rule, Cigna Healthcare is submitting files on its clients' behalf, at no additional cost to the clients. This is the standard option for self-funded and fully insured clients. What Cigna Healthcare will do:
What Cigna Healthcare will not do:
| CAA Provision 204 Prescription Drug & Health Care Spending Report Fact Sheet |
| Highmark | For business in Delaware, New York, Pennsylvania, and West Virginia. Section 204 of the Consolidated Appropriations Act (CAA) of 2021 mandates that data be submitted to the Centers for Medicare & Medicaid Services (CMS) regarding prescription drug spending, healthcare spending, and enrollment for the 2024 calendar year. Highmark will submit the data on behalf of its fully insured and self-funded employer group clients in compliance with this year's deadline. We need your help to collect the necessary premium information for our mutual clients. What do I need to know?
| |
| Horizon BlueCross/BlueSheild of New Jersey | Horizon's Approach to the CAA RxDC 2024 Reporting for Fully Insured Groups (including Level-Funded Plans) Under Section 204 of the Consolidated Appropriations Act, 2021 (CAA), insurance companies and employer-based health plans are required to submit information about prescription drugs and health care spending to the Centers for Medicare & Medicaid Services (CMS). This data submission is called the RxDC (prescription drug data collection) report. This information must be submitted to CMS by June 1, 2025, for 2024 data, and every year after that, through a web portal set up by CMS. What information do insurance companies and employers submit to CMS? The CAA requires insurance companies and employer-based health plans to submit information about:
How will this information be used? The data submitted by insurance companies and employer-based health plans will help to:
What do you need to know? Horizon's approach to CAA RxDC for fully insured groups (including Level-Funded plans) with active prescription drug coverage in 2024 will be consistent with our approach for the reporting years of 2020, 2021, 2022 and 2023 submitted to CMS. Horizon will:
Horizon WILL NOT:
Why is Horizon not collecting information such as monthly premium? Horizon has determined that there is sufficient internally captured data regarding the number of members in an insured plan, the life year's calculation, premiums paid, rates, contributions, etc. to produce information for the D1 columns. Going forward, Horizon will review any additional clarification and guidance to ensure compliance with the RxDC requirements and will update our approach, if needed for future submissions. We will inform you of any change necessary to the current procedure. | N/A |
| Imagine 360 | The Consolidated Appropriations Act (CAA) requires that self-funded group health plans (“Plans”) report information on plan medical costs and prescription drug spending to the Secretaries of Health and Human Services, Labor, and the Treasury (the “Departments”) on an annual basis. The data is used to provide insight into increased spending on prescription drugs. The reporting responsibility lies with the Plan Sponsor, but Third-Party Administrators (“TPA”) and Pharmacy Benefit Managers (“PBM”) have most of the information necessary to submit the required data on behalf of the Plans. There are some data elements that Imagine360 would not have in our systems, which require coordination with you, the Plan Sponsor, to collect. Imagine360 will compile and file with the Departments the following:
The reporting for the 2023 calendar year (CY) data is due June 1, 2024. Imagine360 will only submit the above data for our active and former clients that we administered during any period of CY 2023. Files D3 through D8 need to be submitted to the Departments by the Plan Sponsor or the PBM. Unless otherwise communicated, Imagine360 will not submit PBM files on behalf of the Plan Sponsor. Please complete this FORM by April 24, 2024 to include your information in our reporting. Average premium paid by employers and members is a requirement for calendar year 2023. If it is not submitted by the Plan, then you may be found out of compliance. Calculate the average monthly premium equivalent paid by members by taking the total annual premium equivalents paid by members during the reference year and dividing by 12. The same can be done to calculate the average monthly premium equivalent paid by employers. Take the total annual premium equivalents paid on behalf of members and divide by 12. You should divide by 12 even if the coverage was not in effect for the entire calendar year. As always, we appreciate the opportunity to collaborate with you, and we are happy to address any questions you may have. If you would like to discuss this in more detail, please let me know. Additionally, if you have any questions regarding the data files that reflect prescription drug data only (D3-D8), please reach out to your PBM. The RxDC Reporting Instructions can be found here. | N/A |
| Independence Blue Cross | Pending | |
| TripleS | Pending | |
| Trustmark | Pending | |
| United Healthcare | The Consolidated Appropriations Act (CAA) requires insurance companies and employer-based health plans to submit information about:
Centers for Medicare & Medicaid Services (CMS) has indicated that the data submitted by insurance companies and employer-based health plans will help to:
Action Needed:
External mailbox if you run into any technical issues with the survey: caa_rxdc_tech_support@uhc.com | RxDC Brainshark video RxDC Guide RxDC FAQs 2024 RxDC Instructions |
Background
In accordance with the Consolidated Appropriations Act, 2021 (CAA), health plans and health insurance carriers are required to submit certain information about prescription drug and health care spending to the agencies annually. The agencies use this information to issue public reports on prescription drug pricing costs and trends. The inaugural report was released in November 2024 and can be found here.
RxDC reporting collects the following information:
- General information regarding the plan or coverage
- Enrollment and premium information, including premiums paid by employees versus employers
- Total health care spending, broken down by type of cost (hospital care; primary care; specialty care; prescription drugs; and other medical costs), including prescription drug spending by enrollees versus employers and carriers
- 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 expenditures from the previous year
- Prescription drug rebates, fees, and other remuneration paid by drug manufacturers to the plan or carrier in each therapeutic class of drugs, as well as for the 25 drugs that yielded the highest amount of rebates
- The impact of prescription drug rebates, fees, and other remuneration on premiums and out-of-pocket costs
RxDC reporting requirements apply to group health plans, including grandfathered plans, but not account-based plans such as health reimbursement arrangements (HRAs), retiree-only plans, or excepted benefits (e.g., limited-scope dental or vision, onsite clinics, and many employee assistance programs (EAPs)).
Detailed reporting instructions, including templates for the various data files and other important information, can be found on the CMS RxDC website.
Mind Your Ps and Ds
The RxDC reporting requirement takes the form of nine different data files, plus a narrative file, that must be submitted to CMS through their Health Insurance Oversight System (HIOS) via the CMS Enterprise Portal.
The files for RxDC reporting are summarized in the following table:
| Plan File | Data Files (8 separate data files) | Narrative File |
P2 – Group Health Plan List
A P2 file could be submitted on its own, but a data file or narrative file cannot be submitted without an accompanying P2 file | D1 – Plan Details (vendors, # of covered individuals, premiums, etc.)
| Every submission should include a narrative response file to address topics not captured in the data files (e.g., federal or state reinsurance cost-sharing reduction programs, rebates, drugs missing from the CMS crosswalk) |
D2 – Medical Spending Information
| ||
D3-D8 – Drug Spending Information
|
Reporting Responsibilities
Most employer-sponsored health plans rely heavily on their carriers, TPAs, and PBMs to provide the data necessary to report to CMS. Many vendors will submit the reporting on behalf of employer client plans. However, some vendors may choose to instead provide the data to the employer with the expectation that the employer will submit their own data to CMS. Any organization that submits data to CMS is referred to as a “reporting entity.”
It is possible that multiple reporting entities will submit files separately on behalf of a single group health plan to provide CMS with all required data and files. In some cases, separate vendors may include the employer’s data in the same file type (e.g., a PBM and a separate specialty drug vendor both must report their drug data for the year in files D3-D8, or separate TPAs/PBMs within the same plan year must each submit files D1-D2). This relieves the employer from having to collect and consolidate the information from separate vendors into a single data file (although that is an option as well). For carriers, TPAs, PBMs, and other vendors who do handle the RxDC reporting on behalf of group health plans, most will submit aggregated data for all of their clients and will not provide plan-specific data to CMS or the employer.
NOTE: For employers that changed vendors during the reference year (e.g., due to a non-calendar year plan), the reporting submission must reflect all plan data from the reference year, so it will be necessary for the employer to confirm with all service vendors involved with the employer’s group health plan(s) during the reference year that all required data gets submitted.
Common Industry Approaches
As an industry, how carriers, TPAs, PBMs, and other vendors of prescription drug coverage handle RxDC reporting still varies. Some of the more common approaches are set forth below:
- There is some information in the RxDC reporting that the carrier or TPA may not have, so the carrier or TPA may reach out to employers to ask for information about premium splits (employer and employee contributions) – see “Calculating Average Monthly Premiums” below – as well as other data required for the D1 file. Once this information is provided, the carrier or TPA may handle the entirety of a group health plan’s RxDC reporting. However, if the employer fails to timely respond with the requested data, the employer may have to file a P2 and D1 file on their own.
- We have also seen a few carriers and TPAs decide they will file only fields D2-D8, but not the D1, in which case the employer is responsible for submitting the P2 and D1 files.
- For employers using vendors that will not handle the RxDC reporting (only help provide data), or for employers that use multiple unrelated vendors to provide prescription drug coverage (e.g., separate TPAs and PBMs, or carve-out drug coverage), the employer may have to take a more significant role in determining which vendors are reporting which files, and perhaps even consolidating information and submitting more of the files itself.
D1 File Assistance
For employers who have to file their own D1 file, or for employers who are asked to provide information to carriers or TPAs filing the D1 on behalf of the employer’s plan, below is more information to help employers understand the data that is required.
Calculating Average Monthly Premiums
Whether a plan is fully-insured or self-funded, the employer will generally have to provide information to the carrier or the TPA about average monthly premiums paid by the employer and by plan participants (because the vendors generally will not have this information). There is a 2-step process for calculating the average monthly premiums, described below. (Note: Starting with the 2023 reference year reported in June 2024, the process for calculating average monthly premiums changed from a per-member-per-month calculation to a strictly per-month calculation.)
Step 1: Calculate Total Premiums Paid by Members and by the Employer
Fully-Insured Plans
Add up all the premiums paid by plan participants (“members”) over the course of the reference year, regardless of plan option, coverage tier, or rate structure. Then do the same for all premiums paid by the employer.
Self-Funded Plans
Add up all the contributions paid by members over the course of the reference year, regardless of plan option, coverage tier, or rate structure. For the employer’s portion, first calculate the total cost of providing the self-funded coverage and then subtract the contributions paid by members. NOTE: To calculate the total cost of providing self-funded coverage, first add claims costs, administrative costs, administrative services only (ASO) and other TPA fees, and stop-loss premiums. Then subtract any stop-loss reimbursements and prescription drug rebates. You can use claims incurred or claims paid when calculating the total cost. It is similar to calculating the COBRA premium except CMS expects the employer to use actual costs for the year, not expected costs (and don’t include the 2% admin fee).
Step 2: Calculate Average Monthly Premiums by Members and by the Employer
Avg. Monthly Premiums Paid by Members = Total annual premiums paid by members / 12 Months.
Avg. Monthly Premiums Paid by Employer = Total annual premiums paid by the employer / 12 Months.
***Always divide by 12 months even if the coverage was not in effect for the entire calendar year.
In most cases, an employer should end up with a single amount for the Average Monthly Premium Paid by Members and Employer, regardless of how many plans, coverage tiers, or rate structures it maintains. The exception would be if the employer (or the carrier or TPA on the employer’s behalf) is required to report different plans on different lines in the D1 file. This may occur, for example, if the employer offers different plans from different carriers or TPAs, or if the employer offers a mix of self-funded and fully-insured plans. In that case, the employer will need to calculate a separate Average Monthly Premium for each plan or plans required to be reported on a separate line of the D1 file.
How concerned should an employer be with getting this calculation exactly right? While employers should do their best to provide an accurate answer, any minor errors in the calculation are unlikely to be significant. A carrier or TPA filing a D1 is required to aggregate the Average Monthly Premium across its entire book of business by state and market segment. In other words, CMS will generally not see any one employer’s data, but rather a grand weighted average across hundreds or even thousands of employers. Therefore, a small error in one employer’s data will not have a significant impact on the overall data being reported.
Other D1 Fields
For those employers who must complete their own D1, or whose carrier/TPA requests additional information, here are some pointers on how to complete the remaining D1 fields:
Field Names | Notes |
Company Name (Formerly Issuer or TPA Name/EIN) | This should be the name and EIN of the insurance company who issues the fully-insured policy or the TPA who administers the self-funded plan. Do not enter the employer’s name and number unless the plan is both self-funded and self-administered. Do not enter more than one name or number – if there were multiple issuers/TPAs in the same year, they must be entered on separate lines.
|
| Aggregation State | For a fully-insured plan, enter the two-letter postal code for the state where the policy was issued. For a self-funded plan, enter the two-letter postal code for the state of the employer’s principal place of business.
|
| Market Segment | The market segments for group plans are: small group market, large group market, self-funded small employer plans, and self-funded large employer plans. Use the same definition of “small” used in your state to identify the small group fully-insured market (typically less than 50 employees), even for a self-funded plan. Do not enter more than one market segment – if the employer offers multiple plans in different segments (e.g., both a self-funded and a fully-insured plan), they should be listed on different lines.
|
| Life years | Calculate Total Member Months / 12. Report the result to the 8th decimal place. To calculate Total Member Months, choose one day of the month and use it consistently. For each month, determine how many members were enrolled in each plan sponsored by the employer on the chosen day that month, and then add up the 12 monthly member counts. “Members” includes enrolled active employees plus all dependents, COBRA enrollees, retirees, etc.
|
| Earned Premium | This is the total amount of premiums paid to the insurance company for a fully-insured plan for the reference year; this field should be blank for a self-funded plan. This should be the same number used in the numerator when calculating Average Monthly Premiums. Do not reduce the premium to reflect MLR or other similar rebates.
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| Premium Equivalents | This is the total cost of providing self-funded coverage for the year; this field should be left blank for a fully-insured plan. To calculate the total cost of providing self-funded coverage, first add claims costs, administrative costs, ASO and other TPA fees and stop-loss premiums. Then subtract any stop-loss reimbursements and prescription drug rebates. Use the same costs that are used to calculate the COBRA premium except CMS expects the employer to use actual costs for the year, not expected costs (and don’t include the 2% admin fee). This should be the same number used in the numerator when calculating Average Monthly Premiums.
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| ASO/TPA Fees Paid | Report total ASO/TPA fees paid for a self-funded plan for the reference year – this amount should also be included in the premium equivalents amount. This field should be left blank for a fully-insured plan. |
| Stop-Loss Premiums Paid | Report total stop loss premiums paid for a self-funded plan for the reference year – this amount should also be included in the premium equivalents amount. This field should be left blank for a fully-insured plan. |
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