March 13, 2025 Client Alert

As employers may remember from past years, group health plans (and health insurance carriers) must submit detailed information on their plan’s prescription drug and health care spending to the Centers for Medicare & Medicaid Services (CMS) on an annual basis. This reporting is referred to as the “prescription drug data collection” (or “RxDC report”). The next RxDC report is due by June 1, 2025, and covers 2024 calendar year data (RxDC reporting is done on a calendar year basis, regardless of plan year). The RxDC report is comprised of several files, including those that require specific plan-level information, such as plan year beginning and end dates and enrollment and premium data. It also includes files that require detailed information about medical and pharmacy benefits.

For fully insured employer health plans, reporting is generally done by the insurance carrier. Most self-funded employers rely on their third-party administrators (TPAs) and pharmacy benefit managers (PBMs) to submit RxDC reports on behalf of the employer plan. Some self-funded employers may be required to report certain required elements themselves. In addition, employers who have carved out all or some of the plan’s prescription drug coverage will have to work with multiple vendors to complete the reporting. For example, a self-insured employer may use both its TPA and PBM to submit different portions of the RxDC report. And in certain cases, the employer may be responsible for reporting certain files on its own. A health plan’s submission is considered complete if CMS receives all required files, regardless of who submits them.

Employers should start reaching out to their carriers, TPAs, and PBMs, as applicable, to confirm whether the vendors will submit the RxDC files for the employer health plan by June 1, 2025. Employers should confirm that their written agreements with these third parties address the reporting responsibility. Also, both fully-insured and self-funded employers will likely need to provide their third-party vendors with plan-specific information, such as enrollment and premium data, to complete their RxDC submission. Employers should watch for these vendor surveys and promptly provide the requested information. Because employers with self-funded plans are ultimately responsible for RxDC reporting, they should monitor their TPAs’ or PBMs’ compliance with this reporting requirement.

The Trump Administration recently issued an executive order (EO No. 14221, Making America Healthy Again By Empowering Patients with Clear, Accurate and Actionable Healthcare Pricing Information, Feb. 28, 2025), signaling that the administration plans to continue the focus of the previous Trump administration on healthcare transparency and required disclosure by healthcare providers, insurers, and employer group plans of healthcare costs, including prescription drugs.

The first Trump administration imposed the initial healthcare transparency reporting requirements on providers, insurers and health plans. The most recent Executive Order directs federal agencies to rapidly work to implement and enforce the healthcare price transparency regulations issued by the first Trump administration. The new executive order also instructs federal agencies to ensure that the prices disclosed by provider, insurers, and plans constitute the actual price, not estimates. Finally, the executive order instructs federal agencies to update enforcement policies to ensure required disclosures are being made. Given the administration’s focus on disclosure requirements, plans should prioritize the required reporting.

Summary

• Health plans and issuers are required to annually submit RxDC reports by June 1.
• Most employers rely on issuers, TPAs or PBMs to submit RxDC files for their health plans.
• If a carrier is required by written agreement to submit the RxDC report for a fully insured health plan but fails to do so, then the carrier (not the plan) violates the reporting requirements.
• The reporting liability stays with a self-insured health plan, even if a third party contractually agrees to submit the required information.

Reporting Resources

• RxDC webpage
• Frequently Asked Questions
• Reporting instructions
• User Manual