Regulatory Resources
On November 17, 2021, the Departments of Health and Human Services (HHS), Labor and the Treasury (collectively, the Departments), as well as the Office of Personnel Management (OPM), released a Prescription Drug and Health Care Spending interim final rule with request for comments (IFR). This IFR is required under section 204 of Title II (Transparency) of Division BB of the Consolidated Appropriations Act, 2021 (CAA), and implements new requirements for group health plans (plans) and health insurance insurers in the group and individual markets to submit to the Departments certain information about prescription drug and health care spending. The same information will be submitted by Federal Employees Health Benefits (FEHB) Program carriers in coordination with OPM.
This IFC follows several rules issued earlier in 2021 to implement other provisions of the CAA. Two IFCs–Requirements Related to Surprise Billing; Part I, published on July 13, 2021; and Requirements Related to Surprise Billing; Part II, published on October 7, 2021–establish new protections from surprise billing and excessive out-of-pocket costs for consumers. A notice of proposed rulemaking–Reporting Requirements Regarding Air Ambulance Services, Agent and Broker Disclosure Requirements and HHS Enforcement, published on September 16, 2021–establishing new requirements for reporting the costs of air ambulance services, and disclosure and reporting of agent and broker compensation.
Applicability Date and Comment Period
The CAA requires plans and issuers to begin submitting the required prescription drug and health care spending information to the Departments by December 27, 2021, and submit by June 1 of each year thereafter. However, the Departments announced they will provide temporary deferral of enforcement of the December 27, 2021 and June 1, 2022 deadlines, and they will not initiate enforcement action against a plan or insurer that submits the required information for 2020 and 2021 by December 27, 2022.
Comments on this IFC are due at 5 p.m. on January 24, 2022.
The Departments will issue biennial public reports on prescription drug pricing trends and the impact of prescription drug costs on premiums and out-of-pocket costs starting in 2023. These reports are expected to enhance transparency and shed light on how prescription drugs contribute to the growth of health care spending and the cost of health coverage.
Content of Required Submission
This IFR requires plans and insurers in the group and individual markets to submit certain information on prescription drug and other health care spending to the Departments annually, including:
- General information regarding the plan or coverage;
- Enrollment and premium information, including average monthly 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 wellness services), including prescription drug spending by enrollees versus employers and insurers;
- 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 or coverage expenditures from the previous year;
- Prescription drug rebates, fees, and other remuneration paid by drug manufacturers to the plan or issuer in each therapeutic class of drugs, as well as for each of the 25 drugs that yielded the highest amount of rebates; and
- The impact of prescription drug rebates, fees, and other remuneration on premiums and out-of-pocket costs.
The IFR provides that plan sponsors and insurers generally will be required to submit this information aggregated at the state/market level, rather than separately for each plan. The IFR further provides uniform standards and definitions, including for identifying prescription drugs regardless of the dosage strength, package size, or mode of delivery.
For further details on the filing, please click below: