What is RxDC Reporting?
RxDC (Prescription Drug Data Collection) reporting is a requirement under the Consolidated Appropriations Act (CAA) of 2021. The purpose of this reporting is to provide the Centers for Medicare & Medicaid Services (CMS) with data on prescription drug costs and health care spending. The information collected helps federal agencies analyze trends in drug pricing, understand how prescription costs impact premiums, and promote transparency in the healthcare market.
Employers sponsoring health plans—whether fully insured, level-funded, or self-funded—must ensure compliance with RxDC reporting requirements. Understanding your responsibilities based on the type of plan you offer is crucial for compliance and avoiding potential penalties.
Employer Responsibilities by Plan Type
Fully Insured Health Plans
Employers with fully insured health plans generally have limited responsibilities regarding RxDC reporting. The health insurance carrier is responsible for submitting the required data to CMS. However, employers should:
•Confirm with their insurer that the reporting will be completed on their behalf.
•Request documentation from the insurer confirming submission.
•Retain records of compliance in case of future audits or inquiries.
Level-Funded Health Plans
Level-funded plans are a hybrid between fully insured and self-funded plans, where the employer pays a set monthly amount but retains some financial risk. The reporting responsibilities for level-funded plans can vary depending on the insurer’s role. Employers should:
•Determine whether their carrier will handle the RxDC reporting.
•If the insurer does not report on their behalf, coordinate with third-party administrators (TPAs) or pharmacy benefit managers (PBMs) to ensure data submission.
•Maintain documentation of the reporting process and ensure compliance deadlines are met.
Self-Funded Health Plans
For self-funded plans, the employer holds the primary responsibility for RxDC reporting. However, third-party administrators (TPAs) or pharmacy benefit managers (PBMs) may assist with the process. Employers should:
•Confirm if their TPA or PBM will submit the RxDC report.
•If the TPA or PBM does not handle submission, ensure data collection and timely reporting to CMS.
•Keep records of the submission process for compliance verification.
Key Deadlines and Compliance Considerations
RxDC reporting is due annually, typically by June 1st for data from the previous calendar year. Employers should:
•Start discussions with insurers, TPAs, or PBMs well in advance of the deadline.
•Ensure all required data—including total health care spending, prescription drug costs, and premium information—is accurately compiled.
•Monitor regulatory updates, as reporting requirements may evolve over time.
Final Thoughts
RxDC reporting is an essential compliance requirement for employer-sponsored health plans. While fully insured employers have minimal direct responsibilities, those with level-funded and self-funded plans must take a proactive approach to ensure timely and accurate reporting. By working closely with insurers, TPAs, and PBMs, employers can fulfill their obligations, avoid compliance risks, and contribute to greater transparency in healthcare costs.
If you have questions about your responsibilities or need assistance with RxDC reporting, consult your Rose Street Advisors team for assistance. If you are not a current client of Rose Street Advisors, please feel free to contact us at 269-552-3200 or contact@rosestreetadvisors.com to speak to someone.
Justine Dickens
EMPLOYEE BENEFITS ADVISOR
Justine is a devoted and meticulous team member with a passion to educate and support business partners and their employees. Since 2013, Justine’s commitment to her clients has allowed her to instill confidence and stability in the benefits packages offered to their employees. Her strengths allow her to communicate efficiently, focus on customization and understand the complexities of an ever changing industry. She is a Dale Carnegie Graduate and has her NAHU Self-Funded Certification.
When she is not working, Justine is busy running her son and daughter to their practices and games and volunteering in the community. She enjoys playing golf, hiking and spending time with her family and friends.