Under the Consolidated Appropriations Act (“CAA”), plan sponsors are required to submit considerable amounts of data to the United States Department of Treasury, Department of the Labor, and Department of Health and Human Services (collectively, “Departments”). As mentioned in our previous article, plan sponsors often do not have access to the data they are required to report. The original deadline to submit data for reference years 2020 and 2021 was December 27, 2022. However, the Departments have given a grace period until January 31, 2023. The Departments indicated that they “will not consider a plan or issuer to be out of compliance with [the reporting requirements] provided that a good faith submission of 2020 and 2021 data is made on or before [January 31, 2023].”[1]
What Plan Sponsors Need to Know
Pursuant to the CAA, group health plans and insurers are obligated to submit prescription drug and other health care data to the Departments. For a review of what type of plan sponsors are subject to the CAA reporting requirements and what type of data must be reported, please refer to our recent article.
As mentioned above, plan sponsors often do not possess the necessary data and information to submit reports to the Departments. As a result, the CAA allows plan sponsor service providers and/or vendors, such as third-party administrators (“TPAs”) and pharmacy benefit managers (“PBMs”), to submit the required data on their behalf. In fact, the Departments expect that PBMs and TPAs will be the entities who predominantly submit the required reports.
Critically, while it is anticipated that PBMs and TPAs will submit the reports, it is the Plan that ultimately remains liable for ensuring the data is reported. Consequently, plan sponsors must confirm with their vendors that the appropriate data will be submitted by the grace period deadline, January 31, 2023. In addition, to remove all doubt, Plans should be negotiating specific provisions into their service agreements with TPAs and PBMs that obligate the service providers to submit the mandatory reports on behalf of the Plan by each applicable deadline. Indeed, following the deadline for reference years 2020 and 2021, Plans are required to submit the same types of data by June 1, 2023 for reference year 2022. Similarly, for reference years 2023 and beyond, Plans must submit reports by June 1 immediately following the reference year (e.g., for reference year 2023, reports are due by June 1, 2024).
How Frier Levitt Can Help
Frier Levitt’s Plan Sponsor Practice Group provides a host of legal services for health plans and plan sponsors, including reviewing and analyzing PBM contracts, negotiating and drafting PBM contracts, auditing (and where necessary, litigating against) PBMs to verify that they are abiding by the terms set forth in the PBM contracts, and guiding on regulatory and compliance matters (e.g., the Consolidated Appropriations Act). If your organization is a plan sponsor, contact us to learn more about your contractual rights and obligations.
[1] FAQ About Affordable Care Act and Consolidated Appropriations Act, 2021 Implementation Part 56, available at: https://www.cms.gov/files/document/aca-part-56.pdf
