Speaker 1: 0:00

What is happening in the world of RxDC and what do your employers need to know? We'll find out on this episode of Shift Shapers.

Speaker 2: 0:10

Change either energizes or paralyzes. The choice is yours. This is the Shift Shapers podcast, bringing the employee benefits industry interviews with individuals and companies who are shaping the industry's shifts. And now here's your host, david Saltzman.

Speaker 1: 0:31

And to help us answer that question, I've invited my buddy, Dave Mordo, who is the Senior Compliance Officer at MZQ Consulting and an all-around smart guy, to help answer some of these questions. Welcome, Dave.

Speaker 3: 0:43

Well, thank you, david, nice to be back with you. I was with you a couple of years ago and it's nice to be back on Shift Shaper, so thanks for having me.

Speaker 1: 0:52

Always a pleasure, so let's level set for the audience. What is RxDC?

Speaker 3: 0:59

So listen, David, we live now in a world of absolute transparency, where, in the health care arena, we have all the stakeholders deciding let's be transparent and show all of our information to employers and everybody else. So the prescription reporting is part of the Consolidated Appropriations Act of 2021. And it basically said to employers give us all of your information concerning your prescription drug plan that you offer to your employees and, in addition to that, we want to know just about everything, whether it's relevant or not, concerning the employees that you are covered, the data on your prescription, the usage, the claims, all under the guise of let's be transparent. So if health insurers and hospitals and doctors and brokers have to be transparent, employers do too. So one facet of that is the prescriptions because, as you know, the prescription drug issue in our country is in a crisis situation as far as access, as far as usage and as far as price. So let's be transparent about it.

Speaker 1: 2:40

So the government, in their infinite wisdom, has said employers, do some more reports for us. How many pieces of reporting are there? Because they're actually numbered this time right.

Speaker 3: 2:53

Oh, there is a whole spreadsheet. There's a whole college term paper and thesis about the reporting that we have to go through. There's reporting as to employees. There's data that's required as far as monthly premium, that's devoted to the health plan. There's data about claim usage. So there is at least three distinct parts of the reporting that have to be done, all correlated under this prescription reporting umbrella. So is this an annual thing that employers have to do? First reporting was, I believe, in June of 2023, but that was for years 2021 and 2022, because we sort of had a grace period based on the Consolidated Appropriations Act. This year, the reporting for 2024 is going to happen on June 3rd. Normally it would be June 1st, but this year that falls out on a Saturday, so the extension will be June 3rd, which is a Monday of 2024. That is the deadline for reports to be into CMS.

Speaker 1: 4:31

So before we get into a little more detail about what is in the reports and how to calculate them, et cetera, once these reports are done, how do they get to the government?

Speaker 3: 4:42

So the government has set up what is called the health insurance oversight system H I, o, s, and everything will be done electronically. Um, for the most part, uh, I don't know, I don't recall if they have the option to do it manually or via paper. I don't think so. I think you have to register for this oversight system and the data is sent by which? Well, depending on the type of plan, one of the stakeholders, whether it be the employer, the PBM, the insurance carrier, to this electronic website.

Speaker 1: 5:32

What are the penalties if an employer doesn't comply? Let's get all the nitty-gritty out of the way first.

Speaker 3: 5:37

Yeah, you know penalties are an interesting thing. Yeah, they're a threat, but unless the threat is carried out it's not much of a penalty. There are no actual penalties associated with noncompliance of the prescription reporting. There's no crafted. Here is what's going to happen if you specifically do not report this. However, we can interpret some of the penalties under what's called Section 502 of ERISA, whereby it's a standard noncompliance penalty of $100, um for noncompliance. So if you have a pretty large group it's pricey a hundred dollars per Hertz a little bit. So other than that, other than section 502 of ERISA, there's no stated penalty. So what?

Speaker 1: 6:48

does that tell you that's per person per day. Right, that's a per diem penalty.

Speaker 3: 6:54

I believe that is correct, sir.

Speaker 1: 6:56

Yeah, so it can add up really quickly.

Speaker 3: 6:58

Oh yeah, oh yeah, all right, go ahead. The enforcement aspect is. You know it needs to be improved. Go ahead to do this. I have other things to do in running my business. Enforcement is key to get this data out there so employers can manage their costs better.

Speaker 1: 7:39

And now a word from our sponsor. This episode is sponsored by MZQ Consulting, a concierge compliance firm that excels at making the complex simple. Have you seen the news lately? Johnson Johnson is being sued because J&J's health plans failed to negotiate lower prices for prescription drugs. In the case of one drug, the plan paid $10,000 for a drug that regularly is available for under $80. Not only were the members of the benefits committee named personally, but their benefits advisor was also named in the suit.

Speaker 1: 8:15

And that, dear listeners, is why you need a top-flight compliance firm. Yes, mzq handles all the usual compliance stuff, from ACA reporting and tracking to RAP documents, 5500s, mental health, nqtl and QTL analysis and a whole lot more. But the heat is being turned up on fiduciaries who don't act like it. In this environment, using an ERISA attorney-led compliance consulting firm is your best strategy, your clients too, and MZQ Consulting is where you should go For more information. Go to wwwmzqconsultingcom or email them today at engage at mzqconsultingcom. Now back to our conversation. So there are digging into the nitty gritty a little bit. There are eight pieces to this. There are D parts and P parts.

Speaker 3: 9:09

Can you suss that out?

Speaker 1: 9:10

and explain that.

Speaker 3: 9:11

There are. I don't know if I can explain it. There's P1. There's D1. There's D3 through 8. And each of these is correlated to the plan. All right, the P is for the plan and the D is for the plan, and the three through eight. Well, three through eight are the easiest ones to remember. That is, specific usage. How did your employer group perform with their prescriptions throughout the year? What were the most used drugs? What were the most high-priced drugs that your employees used?

Speaker 3: 9:57

All right, very detailed data, not naming anything, any specific employee that's using it, but detailed data on the absolute usage, right down to price, to most expensive, to what type of drug it is. The P1 and the D1 is more about the plan. For instance, what is the average monthly premium over the course of 12 months that you are paying for your health care? And that is computed along with the other D category ones. The letter P is information about your group.

Speaker 3: 10:52

You know the name, all the other types of information that go with the generic information that they require. I don't recall if it says whether or not it's self-funded or fully insured, but it's the standard information. I think the most important part of the reporting is three through eight, where you get into the real weeds of what the usage is. The usage of your prescription plan is going to be better able to guide you in cost saving for the following year or years. The other stuff you know premium is premium that you can deal with. But the actual usage is where you could make some great savings if you understand who's using what and how much that costs.

Speaker 1: 11:54

So employers can just rely on their TPAs and PBMs to create these for them.

Speaker 3: 12:01

I wouldn't use the word rely, david. I would, depending on the type of plan that you have. If you have a fully insured health plan, it is and I hate to use the word it is assumed that the insurance carrier will do the filing of the information on your behalf level-funded. Hopefully you have utilized the services of a third-party administrator or TPA and they will work with you to do that filing. The important thing for all employers to remember is that ultimately, it is the employer's responsibility to make sure this is done. An employer should not sit back with their fully insured plan and say nothing for me to worry about. The insurance company will take care of that.

Speaker 3: 13:02

We suggest strongly that the employer verify with the insurance carrier or the issuer that this will be done and get that in writing from the insurance carrier and also from the third-party administrator. Now, as you know, over the last 24 months, carriers had shifted their policy on whether or not they were going to assist and, if they were going to assist, to what degree they were going to do that. There are many carriers out there that are extraordinarily helpful and there are some that say listen, we'll just give you the basic information, we're not going to get involved with this. You take it upon yourself, it's your responsibility. We'll provide you, as much as we can, some data sheets that need to be filled out so that the issuer, the carrier, can compile all the information as they seek to do the filing. So it comes in different shapes and sizes, but between the employer, the third party administrator and the insurance carrier, depending on the plan design, one of those stakeholders must do the reporting. Again, the overarching responsibility absolutely lies in the hand of the employer.

Speaker 1: 14:46

Well, I'm concerned, then, about a couple of things. I mean, over the last couple, three years, we've seen self-insured groups, in particular, be utilized for groups that are far smaller than they were in the past, and those smaller groups may not have the kind of onboard talent to help calculate this. And some TPAs, some PBMs, have said flat out to the opposite side of the point you just made hey, we're not helping, we'll just give you the data which you know you said. So what do those firms do if they don't feel that they're capable of doing these calculations and these submissions? Because, as I understand it, the high-o system isn't the easiest thing in the world to use either.

Speaker 3: 15:26

No, it's not. And you know, while I don't want to put any extra burden on the broker, advisor of the group, as you know, so much more is being asked of the broker in these days. Um it, it is not just about insurance anymore. The broker has the responsibility of almost being everything about everything to the employer client, and I'm not saying that a broker or a big agency or even a midsize agency should take responsibility for doing the reporting on behalf of their client. But they need to go shopping If it's a self-funded or, in some cases, a level-funded plan on behalf of their employer. They need to find a vendor who will do the data collection and reporting.

Speaker 3: 16:28

Your manufacturers, your blue-collar industries and even your white-collar industries do not know what to do. They're not equipped to handle the reporting, Even if they have a wonderful HR department or wonderful compliance department. It is incumbent upon the broker, in my opinion, to help find a suitable vendor to do the reporting. The information that we get from the PBMs and the insurance carriers are vital. They need that information and a vendor can help move that along and get the data in a timely fashion. But everybody has to work together here. Everybody has a little bit of a job, from the employer to the broker, to the TPA, to the carrier, to the PBM. They're all intertwined and in order to submit a proper, accurate report, everybody ideally has to work together.

Speaker 1: 17:42

Let's explore that a little bit. If you're a broker and you're going out in the marketplace and you're looking for help for your clients doing this, what are the kinds of questions you need to ask of the people that you're interviewing and what do you need to know?

Speaker 3: 17:59

Well, look, obviously, as a broker, you have to have a basic understanding of the reporting itself. You have to know the pieces. You have to find a vendor that obviously is going to be reasonably priced. You have to make sure that they will deliver a contract that can be reviewed by the employer's legal counsel, by the broker, reviewed by the employer's legal counsel, by the broker, if they feel adept enough to read a contract and point out what the TPA or what the vendor will or will not provide. You have to make sure that the information will be delivered in a timely fashion. You have to get you have to get, quite frankly, business associate agreements in place for the purposes of HIPAA.

Speaker 3: 19:02

That's a little bit of a peripheral issue but nonetheless important. You know we're talking about medications that employees take and there's certain proprietary and protected information there. But you have to do your due diligence in shopping for a vendor that has experience. How many of these have you done in 2023? How many did you do for plan years 2021 and 2022? You're vetting the vendor like you would anything else, and they have to be proficient, they have to be timely, they have to be reasonably priced and they have to have a relationship with the PBM and or the carrier. That will let them get the data relatively quickly relatively quickly.

Speaker 3: 19:51

This episode is going to air early in May Is there time to waste, or do brokers and clients and plans need to kind of start the engines. The engines should have been turned on already Now. We're at the point where we should be revving them up a little bit. You need to start. The insurance carriers have done a reasonably good job. Those that are cooperative have done a reasonably good job in getting the information that they need out to their employer groups already. I would hope that the TPAs have done the same.

Speaker 3: 20:32

I think in the next five to 10 days we now have to put the engine in drive and move. You and I both know that a bunch of submissions will be done on, you know, may 31st, the Friday before, unfortunately. But before you blink, david, june 3rd will be upon us and we are, as you say, airing in the middle of May or early May. There's no more time to waste because you think you have a complete report and it should be reviewed by somebody before you submit, and inevitably there's a piece or two that's missing, or somebody has a question, or maybe somebody has a different interpretation, depending on who in your organization is going to look at it. So, yes, we should be putting the engine in drive very soon to start submitting these reports.

Speaker 1: 21:41

And that's a great place to end our conversation for today. Come back next week. We're going to be talking to Dave some more. He's graciously told us that he will stick around for another session. We're going to talk about a broad range of legislative and regulatory things and things that, as advisors, you need to know are out there in the wind and you need to be aware of. But for the moment, Dave Morto, Senior Compliance Officer at MZQ. Dave, thanks for sharing your expertise with us.

Speaker 3: 22:04

Thank you sir.

Speaker 2: 22:06

Shout out to the crew at Grand River Agency for their awesome post-production. This Shift Shapers podcast is copyrighted content and may not be reproduced in whole or in part without the express written permission of Shift Shapers Solutions LLC. Copyright 2024.