New federal rule requires health plans to report costs: 6 things to know

The Biden administration issued an interim final rule Nov. 17 that requires health plans to report prescription drug and health coverage costs. 

Six things to know: 

1. Under the rule, health plans, health insurance issuers offering group or individual coverage and health benefits plans for federal employees must submit information on prescription drug and other healthcare spending annually. The rule requires disclosure of healthcare costs broken down by type such as hospital care, primary care or specialty care. 

2. The rule, the fourth in a series implementing the No Surprises Act and transparency requirements of the Consolidated Appropriations Act, requires health plans and insurance issuers to submit the 50 most frequently dispensed brand prescription drugs, the 50 costliest drugs by total annual spending and the 50 prescription drugs with the greatest increase in plan expenditures from the previous year. 

3. The new requirements will apply starting with data from 2020. However, enforcement of the new requirements is deferred until Dec. 27, 2022, to give health plans and insurance issuers time to come into compliance. This means the required information for 2020 and 2021 is due by Dec. 27, 2022. 

4. HHS, the Labor Department and the Treasury Department will use the information collected to inform 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. CMS said the reports are expected to enhance transparency and shed light on how prescription drugs contribute to healthcare spending growth and the cost of health coverage. 

5. "Life-saving prescription drugs should not cost anyone their life savings," HHS Secretary Xavier Becerra said in a Nov. 17 news release. "By collecting key data on the costs of prescription drugs, we are promoting competition and transparency in the healthcare industry as we continue to curb the rising costs of drugs and surprise medical bills."

 6. Comments on the interim final rule are due Jan. 24, 2022.

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