Interim Final Rule with Request for Comments Released, Requiring More Transparency
In mid-November 2021, several government agencies released a joint interim final rule with request for comments that requires health insurance issuers, employer-based health plans, and other group health plans to report on prescription drug and health coverage costs.
The interim final rule with request for comments was issued by the Departments of Health and Human Services (HHS), Labor, the Treasury (collectively, the Departments), and the Office of Personnel Management and is the fourth rule in a series issued by the Departments to implement the No Surprises Act and transparency requirements of the Consolidated Appropriations Act (CAA), 2021.
This interim final rule requires health plans, health insurance issuers that offer group or individual health insurance coverage, and health benefits plans offered to federal employees, to submit select data to the Departments. Once the Departments receive the information, they will work through the HHS Assistant Secretary for Planning and Evaluation (ASPE) to publish a report on prescription drug pricing trends and rebates, including the impact on premiums and consumers’ out-of-pocket costs. Among the select data required to be reported are information on average monthly premiums and drug spending for patients, compared to their employers and/or group health plans/health insurance issuers.
Additionally, since prescription drugs account for a significant portion of health care spending, the interim final rule also implements requirements to identify specific cost drivers of prescription drugs. Plans and issuers must provide the Departments with an annual overview of their top 50 drugs across key areas of concern, including: the most frequently dispensed brand prescription drugs; the costliest prescription drugs; and the prescription drugs that had the greatest increase in total annual plan spending over the previous year.
The Departments also note that information on prescription drug rebates, fees, and other remunerations paid by drug manufacturers to plans, issuers, and pharmacy benefit managers (including the top 25 drugs that generate the highest rebate amounts) will help the Departments understand and report on prescription drug costs, and how they fluctuate over time.
“Life-saving prescription drugs should not cost anyone their life savings,” said HHS Secretary Xavier Becerra. “Today the Biden-Harris Administration is taking additional steps to make health care more accessible and affordable for patients. By collecting key data on the costs of prescription drugs, we are promoting competition and transparency in the health care industry as we continue to curb the rising costs of drugs and surprise medical bills.”
“With today’s rule, we’re taking more steps to make sure that the care people receive is affordable,” said CMS Administrator Chiquita Brooks-LaSure. “Expanding on our earlier efforts to implement the No Surprises Act, we will monitor pricing and premium trends to better identify barriers to the low-cost, comprehensive, and person-centered care we all deserve.”
What’s Next?
The regulations become effective on December 23, 2021. The regulations are generally applicable beginning December 27, 2021. The OPM-only regulations that apply to health benefits plans and carriers under the FEHB Program are applicable beginning December 27, 2021. However, as outlined below, the Departments will provide temporary and limited deferral of enforcement during the first year of applicability and this temporary and limited deferral of enforcement will apply, in the same manner, to FEHB plans and carriers.
Details on data submission requirements—including how data will be collected and analyzed—can be found in CMS’ fact sheet. The new data submission requirements will apply starting with data from the 2020 calendar year. However, the Departments are deferring enforcement of the new requirements until December 27, 2022, to give regulated entities time to come into compliance. This means the required information for 2020 and 2021 is due by December 27, 2022, although the Departments welcome sooner submissions. The Departments anticipate releasing their first report in June 2023 and biennially thereafter.
Comment Deadline
To be ensured consideration, comments must be submitted by January 24, 2022. Comments can be submitted electronically here, using file code CMS-9905-IFC.