Healthcare Cost & Quality
| Sep 15 2022

Upcoming Rx Reporting—What about Point Solutions?

Jennifer Wiseman
Principal, Mercer’s Law & Policy Group
Cheryl Hughes
Principal, Mercer’s Law & Policy Group
Steven Schinderle
Principal, Mercer Health

As Dec. 27, 2022 – the deadline to report detailed data to the Centers for Medicare & Medicaid (CMS) about prescription drug pricing and healthcare spending – approaches, employers should consider whether they must report costs associated with third-party point solutions that provide medical care and are offered to employees. Given the wide range of point solutions available – from technology to drive engagement, to disease management, fertility benefits, and behavioral health carve-outs – there isn’t a simple answer.

The first step for employers is to evaluate each point solution separately, with the assistance of legal counsel, to determine whether the point solution’s costs can be excluded from reporting. A particular point solution’s cost data can be excluded for any of the following reasons:

  • The point solution is not a group health plan. The reporting obligation applies to group health plans, defined under ERISA as a plan, fund or program providing medical care or benefits to employees (or former employees) and their dependents through insurance, reimbursement or otherwise.
  • The point solution is an account-based plan. The reporting obligation doesn’t apply to account-based plans such as HRAs, health FSAs and HSAs.
  • The point solution is an excepted benefit. Excepted benefits – such as dental and vision plans, employee assistance plans (EAPs), fixed indemnity programs, disease-specific insurance policies, or onsite clinics – do not have to report data. Some point solutions may fit within one of the excepted benefit categories, although employers should be careful to consult with counsel. Some of the categories, such as EAPs, have specific criteria that must be satisfied. Retiree-only plans are also exempt from prescription drug reporting.
  • The point solution offers wellness services that are not billed on a claim. Wellness services, defined as “activities primarily designed to implement, promote, and improve health,” are not reportable unless they are billed on a claim. The instructions are not clear about how a group health plan should report wellness services that are offered through the PBM. Additional guidance on that issue would be helpful.

If the employer and its legal counsel conclude that point solution data must be reported, next steps depend on whether the point solution covers pharmacy benefit drugs.

  • The employer should ask if the medical TPA will report the point solution’s nonpharmacy data along with the plan’s other healthcare spending information (on the D2 total annual healthcare spending file). The medical TPA may have the data already—for example if it processes point solution claims, or tracks point solution costs for accrual towards the out-of-pocket maximum or deductible.
  • If the point solution provides pharmacy benefit drugs, the employer should similarly see if the PBM will submit the point solution’s pharmacy benefit drug data on its D3-D8 pharmacy benefits data files.
  • If the TPA and/or PBM is unable or unwilling to report data from the point solution, the employer may have to combine and submit the data from its vendors under the current CMS instructions. Employers should work with legal counsel on a method for submitting such data, which may be challenging.
Show More
Show Less

Speak with a consultant

Complete this form to speak with a consultant.