Rx Pricing and Health Care Spending Transparency: Interim Final Rule

Rx Pricing and Health Care Spending Transparency: Interim Final Rule

On November 17, 2021, the tri-agencies (HHS, Labor, and Treasury) and the Office of Personnel Management (OPM) released an interim final rule with request for comments (IFC), titled “Federal Register: Prescription Drug and Health Care Spending.”

The IFC, required by the Consolidated Appropriations Act (CAA) of 2021, implements the requirements of Division BB Section 204 of the CAA. The goal of Section 204 (and the other transparency provisions in the CAA) is to promote price competition and ultimately bring down health care costs and prescription drug prices through increased transparency.

Who should report

CAA Division BB Section 204 requires individual and group health plans to report the information listed below to the tri-agencies (Health & Human Services (HHS), Labor, and Treasury).

What should be reported

For prescription drugs:

  • The 50 Rx drugs most frequently dispensed through claims paid by the plan, and the total number of claims paid by each plan for each such drug.
  • The 50 most costly Rx drugs – based on annual spending – for each plan, and the total amount spent by each plan for each such drug.
  • The 50 Rx drugs with the greatest increase in expenditures over the prior plan year, and, for each such drug, the amount of such change in expenditures over the prior plan year.
  • The 25 drugs with the greatest impact on premiums due to rebates, fees, or other compensation paid to the plan/providers by drug manufacturers, the amount of such rebates, fees, or other compensation for each such drug, and for each therapeutic class of drugs.

For other expenses:

  • Total spend on health care services including: (1) hospital, health care provider, and clinical service costs, broken out for primary care and specialty care; (2) costs for prescription drugs; and (3) other medical costs, including wellness services.
  • Average monthly premium paid by employers on behalf of enrollees, as applicable, and that paid by enrollees.

How to report

The IFC provides that plan sponsors, issuers, and FEHB carriers should submit the required information aggregated at the state/market level (rather than by plan). The IFC also includes uniform standards and definitions, including terminology for identifying prescription drugs “regardless of the dosage strength, package size, or mode of delivery.”

When to report

As per the CAA, each plan must report the required information by December 27, 2021 (1 year after the CAA enactment), and by June 1 each year thereafter. However, the IFC provides that the tri-agencies will delay enforcement to December 27, 2022 (for reporting 2020 and 2021 data).

Additional Resources:

The November IFC is the third in a series of interim final rules on the Consolidated Appropriations Act. The full list includes:

Next Steps

Employers and plan sponsors should engage their third party administrators and insurers in order to complete the required reporting. The sponsor of an insured plan is relieved of liability for this reporting if the insurer agrees to do it. A sponsor of a self-funded health plan can, and should, contractually obligate its third-party administrator or pharmacy benefit manager, as applicable, to perform the reporting. Ultimately the plan sponsor of the self-funded plan remains responsible; plan sponsors may want to consider indemnification language in its service agreement.


The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.

Rx Pricing and Health Care Spending Transparency: Interim Final Rulehttps://www.cbiz.com/Portals/0/Images/Prescription drug costs.jpg?ver=RKmFYMXK8JeH5FsnbWeyVA%3d%3dAlthough enforcement is delayed until December 2022, plans should engage TPAs and PBMs to complete the required reporting. 2022-01-11T20:00:00-05:00Althoughenforcement is delayed until December 2022, plans should engage TPAs and PBMsto complete the required reporting.Regulatory, Compliance, & LegislativeEmployee Benefits ComplianceNo