CMS Issues New FAQs on Prescription Drug Reporting for Plans with Multiple Data Sources

CMS issued new FAQs on the prescription drug data collection (RxDC) reporting requirements, including related to employers with multiple reporting entities.


November 08, 2022

On September 23, 2022, the Centers for Medicare and Medicaid Services (CMS) issued six (6) new Frequently Asked Questions (FAQs) related to the prescription drug data collection (RxDC) requirements for employer plan sponsors enacted by the 2021 Consolidated Appropriations Act (2021 CAA). The new FAQs provide guidance for scenarios where a plan sponsor has multiple reporting entities and/or when a plan sponsor experience a change in reporting entity from the prior year.


The 2021 CAA established new requirements on group health plans and health insurance issuers to report specific prescription drug and plan spending data to the Federal government. Plans and issuers need to submit the following prescription data for the preceding calendar year (i.e., reference year) to the Departments of Health and Human Services (HHS), Labor (DOL), and Treasury (collectively the Departments). Plans and issuers must also submit identifying plan information in conjunction with these eight data files:

File Type Description 
D1 Premium and life years
D2 Spending by category
Top 50 most frequent brand drugs
Top 50 most costly drugs
Top 50 drugs by spending increase
Prescription drug totals
Prescription drug rebates by therapeutic class
Prescription drug rebates for the top 25 drugs

The Departments will utilize the collected data to issue biannual reports on plans and issuers’ prescription drug reimbursements, pricing trends, and impact of prescription drug costs on health plan premiums.

Although both involve prescription drug information, the RxDC requirements are distinct from the No Surprises Act provisions of the 2021 CAA, in particular the Transparency in Coverage (TiC) machine-readable file requirements. The TiC rules originally required three machine-readable files (in-network, out-of-network, and Rx) but the Rx file requirements were stayed by the Departments in-light of the 2021 CAA reporting and further rulemaking consideration. The 2021 CAA RxDC requirements were not stayed and remain effective.

The 2021 CAA initially imposed a December 27, 2021 deadline for plans and issuers to submit RxDC reports with 2020 data. However, the Departments issued FAQs on August 20, 2021 deferring enforcement for one year. Plans and issuers must submit data for both the 2020 and 2021 reference years by December 27, 2022. Beginning with the 2022 reporting, plan and issuers must submit data by June 1, 2023, and by June 1 annually thereafter.

Newly Issued FAQs Regarding Multiple Data Sources

Among other issues, the new FAQs provide guidance for scenarios where employer plan sponsors have multiple reporting entities (e.g., multiple third-party administrators; carve-out vendor arrangements such as for behavioral health). Under the original RxDC instructions issued by CMS on June 29, 2022, employer plan sponsors would likely have had to coordinate and combine their vendors’ plan-level data themselves and submit individual RxDC files to CMS. The newest guidance provides a degree of administrative clarity and flexibility to plan sponsors with these types of circumstances, including:

  • Reaffirming that multiple reporting entities may submit different data file types (files D1 – D8) for the same plan or issuer; and
  • Confirmation that multiple reporting entities may submit the same data file types for the same plan or issuer – but only if there are extenuating circumstances that prevent the vendors from coordinating with each other. The FAQ implies that plans also may need to contact the CMS help desk in order to use the relief.

Two of the new FAQs also address reporting circumstances where a plan or issuer experiences a vendor – and reporting entity – change from the prior year:

  • Outlining the approaches to determine the top 50 drugs with the greatest increase in spending (file D5); and
  • Explaining how to calculate restated prior year rebates, fees, and other renumeration (files D6 – D8).

Next Steps

Employer group health plan sponsors must submit data reports for the 2020 and 2021 reference years by December 27, 2022. Reporting with 2023 data will be due by June 1, 2023.

Plan sponsors should review the latest FAQs in conjunction with legal counsel and should and watch for additional guidance from Federal regulators that may be issued prior to the first reporting deadline. Plan sponsors should continue to coordinate with all vendors to ensure applicable reporting entities are prepared to file by the deadline, and/or are prepared to supply directly to the plan sponsor data that requires aggregation with data from another entity directly to the plan sponsor. Plan sponsors – particularly those who have multiple vendors or complex vendor arrangements – are encouraged to maintain documentation of any extenuating circumstances that may impact or prevent submission of single data files for the plan.

Although the latest FAQs address an aspect of the administrative burden for employers, Business Group on Health continues to advocate that the Departments further clarify the practical filing considerations – such as the Departments relying on the multiple vendor-submitted files versus requiring extensive documentation from the plan sponsor of extenuating circumstances. The Business Group will keep members informed of subsequent developments.

If you have questions, comments, or concerns about these or other regulatory and compliance issues, please contact us.

We provide this material for informational purposes only; it is not a substitute for legal advice.

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