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On November 17, the Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury ("the Departments"), as well as the Office of Personnel Management (OPM) released an interim final rule with request for comments (IFC), entitled "Prescription Drug and Health Care Spending." The rule is the fourth in a series that the Departments are issuing to implement the No Surprises Act and transparency requirements of the Consolidated Appropriations Act (CAA), 2021. The IFC outlines new requirements for health plans and health insurance issuers in the group and individual markets, as well as Federal Employees Health Benefits (FEHB) Program carriers, to submit certain information about prescription drug and health care spending. The Departments will issue biennial public reports on prescription drug pricing trends and the impact of prescription drug costs on premiums and out-of-pocket costs starting in 2023.

The IFC requires that plan sponsors, issuers, and FEHB carriers submit information including general plan and coverage information; information on average monthly premiums and drug spending for patients, compared to their employers and/or group health plans/health insurance issuers; and total health care spending broken down by type of cost. According to a press release, "since prescription drugs account for a significant portion of health care spending for consumers, plans, issuers, and the government alike, the interim final rule also implements unique requirements to identify specific cost drivers." Plans and issuers must also provide 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. Additional information must be provided on prescription drug rebates, fees, and other remunerations.

The new data submission requirements will apply starting with data from the 2020 calendar year, but the Departments are deferring enforcement until December 27, 2022 to give regulated entities time to come into compliance. The Departments anticipate releasing their first public report in June 2023 and biennially thereafter.

For more information, see this Fact Sheet, Press Release, and the Interim Final Rule.

Additional information is also available in the attached Tax Alert.

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ATTACHMENT

IFC on drug and healthcare spending