Section 204 of the Consolidated Appropriations Act (CAA) requires group health plans and health insurance issuers to submit information on prescription drugs and healthcare spending (RxDC) to the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury. The Centers for Medicare and Medicaid Services (CMS) is collecting this data on behalf of the Departments (commonly referred to as ‘Prescription Drug Data Collection’ or ‘RxDC’).

The first RxDC reporting submission, for calendar years 2020 and 2021, was due December 27, 2022, and extended to January 31, 2023. Kaiser Permanente submitted all required reports by January 31, 2023 and June 1, 2024, and will be submitting by the annual June 1 deadline going forward.

No, the RxDC reporting data is not required to be posted or distributed publicly. This data will be compiled and aggregated into several report files and submitted to CMS per the regulation.

No, the RxDC reporting requirements specified in section 204 of the Consolidated Appropriations Act (CAA) do not apply to any Medicare or Medicaid plans. These requirements apply to health insurance issuers offering group coverage, individual market coverage, and fully insured and self-funded group health plans.

The RxDC reporting data is aggregated by state and market segment. Market segments are defined by CMS and include the following:

• Individual market, excluding the student health plan market
• Student health plan market
• Fully insured small group market
• Fully insured large group market, excluding the FEHB line of business
• Self-funded group health plans offered by small employers
• Self-funded group health plans offered by large employers
• FEHB line of business

If you want to learn more about section 204 of the Consolidated Appropriations Act, 2021, including reporting instructions, please visit cms.gov.

Plans and issuers in the group and individual markets are required to submit the following information on prescription drug and other health care spending annually:

• General information identifying the insurer or plan
• Enrollment and premium contribution information
  
  • Beginning with the 2023 calendar year submission this also included:
    
    • Average monthly premium paid by members/employees: total premium paid by members/employees divided by 12
      
    • Average monthly premium paid by employers: total premium paid by employers divided by 12
      
• Prescription drug spending by enrollees versus employers and issuers
• The 50 most frequently dispensed brand prescription drugs
• The 50 costliest prescription drugs by total annual spending
• 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.
• The impact of prescription drug rebates, fees, and other remuneration paid by prescription drug manufacturers on premiums and out-of-pocket costs.

• Hospital spending – Spending on services provided by hospitals to members and billed by the facility.
• Primary care spending – Spending on clinical health care services provided by a primary care provider in a doctor’s office or outpatient care center.
• Specialty care spending – Spending on clinical health care services provided by specialists.
• Other medical costs and services – Spending for all other professional and facility clinical health care services and equipment not reported as hospital, primary care, or specialty care.

Premium and Life Years data for each plan, aggregated by state and market segment:

• Life Years – The total number of members covered by the plan on a given day of each month of the calendar year (total member months), divided by 12.
• Earned premium – All money paid by a member as a condition of the member receiving coverage. This also includes any other fees or contributions associated with the health plan.
• Premium equivalents – For self-funded plans or other agreements that do not rely primarily on premiums, these equivalent amounts represent the total cost of providing or maintaining coverage.
• Administrative Services Only (ASO) and other Third-Party Administrator (TPA) fees paid
• Stop loss premium paid
• Average monthly premium paid by members/employees: total premium paid by members/employees divided by 12
• Average monthly premium paid by employers: total premium paid by employers divided by 12

• Rebates retained by Pharmacy Benefit Managers (PBMs)
• Rebates retained by plans/issuers/carriers
• Rebates passed to members at point of sale (POS)
• Net transfer of other remuneration from manufacturers to plans/issuers/carriers/PBMs
• Net transfer of other remuneration from pharmacies to issuers/plans/carriers/PBMs
• Total rebates, fees, and other remuneration
• Restated prior year rebates, fees, and other remuneration
• Bona fide service fees – Fees that a manufacturer pays to a PBM that represent fair market value for a bona fide, itemized service performed on behalf of the manufacturer.
• PBM spread amounts – The difference between the amount the plan, issuer or carrier paid to the PBM and the amount the PBM paid to manufacturers, wholesalers, pharmacies, or other vendors.

Kaiser Permanente will include a narrative response in each annual RxDC reporting submission to address the following areas defined by CMS (as necessary):

• Methodology for determining employer size for self-funded plans (actual vs. estimate)
• Description of how net payments from federal or state reinsurance or cost-sharing reduction programs were accounted for in the data submitted (if applicable)
• Drugs prescribed during calendar year and included in the report(s) missing from CMS crosswalk
• Description of methodology for estimation of the portion of bundled or alternative payment arrangements that can be attributed to drugs covered under a medical benefit and any allocation methods (if applicable)
• Prescription drug rebate descriptions
• Allocation methodology for prescription drug rebates
• Impact of prescription drug rebates, including variations in impact across market segments and types of plans
  

Fully insured employer groups will need to complete the RxDC survey form on Kaiser Permanente’s employer portal. In the form they will provide the following information:

• Employer Identification Number (EIN)
  
• Form 5500 Plan Number, if applicable (ERISA plans only)
• Average monthly premium paid by members/employees: total premium paid by members/employees divided by 12
• Average monthly premium paid by employers: total premium paid by employers divided by 12

All employer groups must fill out this form by March 31 annually, to help ensure compliance with reporting requirements.

Self-funded groups: Kaiser Permanente representatives will reach out to each self-funded group, via email, with instructions and offline forms that will be prepopulated with the group’s information along with blank fields for the group to complete and return to Kaiser Permanente.

Specific CA Small Groups: Small group employers associated with Covered California for Small Business (CCSB) and Cal Choice do not need to complete the form as these exchanges will be providing the needed data for all the small groups they serve, aggregated at the exchange level, to Kaiser Permanente.

Kaiser Permanente will submit 11 required files by June 1, annually, as part of an aggregated RxDC report submission:

• Plan List Files
  
  1. Individual and student market plan list (P1)
  2. Group health plan list (P2)
  3. FEHB plan list (P3)

• Data Files
  
  4. Premium and Life-Years (D1)
  5. Spending by Category (D2)
  6. Top 50 Most Frequent Brand Drugs (D3)
  7. Top 50 Most Costly Drugs (D4)
  8. Top 50 Drugs by Spending Increase (D5)
  9. Rx Totals (D6)
  10. Rx Rebates by Therapeutic Class (D7)
  11. Rx Rebates for the Top 25 Drugs (D8)

Below are the Kaiser Permanente reporting entities that will submit the required RxDC reporting data on behalf of all groups for each submission:

• Kaiser Foundation Health Plan, Inc.
• Kaiser Permanente Insurance Company
• Kaiser Foundation Health Plan of Washington
• Kaiser Foundation Health Plan of Washington Options, Inc.

After the June 1 submission deadline, employer groups may reach out to their account manager to confirm the status of any RxDC reporting submission to CMS.

Kaiser Permanente will submit all applicable RxDC reporting data for the 2023 calendar year for all employer groups, including all premium contribution data received aggregated by state and market segment. Since two entities should not submit the same RxDC reporting data, employer groups should not compile or submit any of the applicable reports.

If an employer group is unable to provide their premium contribution data via Kaiser Permanente’s survey by the last working day of March, they will need to submit their group’s D1 and P2 files directly to CMS by the June 1 deadline. Detailed reporting instructions, including templates for the various data files and other important information, can be found on the CMS RxDC website.

Kaiser Permanente will obtain all required data from its contracted PBMs and TPAs, as necessary, to submit the required data for the RxDC reporting on behalf of all group health plans with active pharmacy benefits or coverage during the applicable calendar year of the submission. Please note that for group health plans with pharmacy benefits carved out of their coverage, the PBM or entity that administers these benefits will be responsible for submitting data files D3-D8 in a separate report submission.

Kaiser Permanente will submit the RxDC reporting files in .csv format as required by the regulation.

As required by the regulation, Kaiser Permanente will include the required RxDC reporting data for the part of the calendar year the group had actively managed pharmacy benefits with one of Kaiser Permanente’s contracted PBMs or TPAs.

Currently, Kaiser Permanente does not plan to charge for the RxDC reporting submissions.

No, unique group names and group numbers are generated by each issuer or third-party administrator and are not required to align across separate RxDC reporting submissions.

Employer groups should gather the following information before starting the form:

• The total premium paid by all employees through payroll contributions for the prior calendar year (for example, 2023 data was used for the 2024 submission period).
• The total premium paid to Kaiser Permanente minus the employees’ contributions for the prior calendar year.

They should also have their EIN and IRS Form 5500 Plan numbers (for ERISA plans only) available.

They are included in the Documents section of the Employer website:

• Go to account.kp.org
• Sign on to your account
• Hover your mouse over the Documents menu and click on Group documents
• Under Document Categories, click on Invoices
• Click on the Download PDF link under ACTIONS for the date of the statement you wish to view or click on Download XLSX or Download CSV to view the Billing Census spreadsheet.

The employer group should go to Kaiser Permanente’s employer portal and relaunch the survey to resubmit their information. Kaiser Permanente will use their most recently completed form.

Yes, they will need to provide the data for the part of year they had coverage with Kaiser Permanente.

The “State in which the group agreement is issued” is where the group agreement is situated irrespective of where the employee lives.

CMS instructions state to use the following methodology to calculate the average monthly premiums for Prescription Drug Data Collection (RxDC) reporting.

• Average monthly premium paid by members = Total premiums paid by employees divided by 12.
• Average monthly premium paid by employer = Total premiums paid by employer divided by 12.

Divide by 12 even if the coverage was not in effect for the entire year.