Updated CMS instructions limit Rx reporting for wellness services
A new prescription drug reporting mandate, adopted as part of the 2021 Consolidated Appropriations Act (CAA), requires group health plans and health insurers to report detailed data about prescription drug pricing and healthcare spending. The first reports are due by December 27, 2022.
Only wellness services billed as a claim are reported. In an early June 2022 post, we explained that the CMS instructions for the reporting mandate were not clear on which wellness programs or expenses were required to be reported. Since that post, CMS made a number of updates to the instructions, including clarifying which wellness services are required to be reported. The updated instructions limit reporting of wellness services to those “billed on a claim” (i.e., only wellness services covered under a self-funded or fully-insured group health plan). For example, if a wellness program required a medical exam (e.g., a biometric screening) and the cost of that medical exam is submitted as a claim and covered under the employer’s major medical plan, the cost of that medical exam would need to be included in the major medical plan’s D2 (spending by category) data file under “Other medical costs and services.” A wellness service paid for outside of a group health plan claim is not subject to reporting. So, actual rewards, incentives, bonuses or cost-sharing reductions that are not reflected in group health plan claims are not subject to reporting
For purposes of the reporting mandate, wellness services are defined as “activities primarily designed to implement, promote, and improve health.”
For each year being reported, employers should review the wellness services that were billed as a claim through their group health plan and confirm the group health plan’s TPA or insurer is including those claims in the “Other medical costs and services” category of the D2 (spending by category) data file being reported for the group health plan. 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.
What if the wellness service qualifies as an excepted benefit?
The reporting mandate does not apply to coverage that provides only excepted benefits, such as employee assistance programs (EAPs) and disease-specific policies of insurance meeting certain requirements. If an employer’s wellness services fit within the definition of an excepted benefit, then the wellness service shouldn’t be subject to reporting. But if the wellness service is billed as a claim under the major medical plan, it may still be included in reporting as the TPA or insurer may not be able to separate those claims out from the reporting submission. Whether wellness services are excepted benefits is not always clear (e.g., whether the amount, scope, and duration of covered services of an EAP constitute significant benefits in the nature of medical care), so employers should work with legal counsel when making this determination.