On April 13, 2021, the CMS Office of Financial Management issued an alert clarifying who has the responsibility for reporting primary prescription drug coverage as the responsible reporting entity (RRE).
Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) contains mandatory reporting requirements for fully insured and self-insured group health plans. These reporting requirements are commonly known as the “Medicare Section 111 reporting requirements,” and are meant to assist CMS in determining coordination of benefit responsibilities between the group health plan and Medicare. RREs are responsible for the actual Section 111 reporting and are required to report whether active covered individuals are entitled to Medicare Part A, Part B, Part C and Part D coverage. Prior to January 1, 2020, reporting of prescription drug coverage (Part D) was optional, but is now required.
Generally, an RRE is the insurer for a fully insured plan, the third-party administrator for a self-insured plan and the plan administrator for a self-insured plan that self-administers. The alert explains that the entity considered the RRE for primary prescription drug coverage reporting is the entity that has the direct prescription drug relationship with the employer/plan sponsor. CMS provides specific examples to help reduce confusion, including:
- **When the employer/plan sponsor contracts directly with the group health plan for hospital, medical and/or prescription drug coverage, the group health plan (and if applicable, its third-party administrator) is the RRE responsible for reporting prescription drug coverage. This is true even if the group health plan has carved out the processing and payment of the primary prescription drug claims to a pharmacy benefits manager (PBM), as the group health plan is still the entity with the direct relationship with the employer/plan sponsor for prescription drug coverage.
**When the employer/plan sponsor contracts with a group health plan for medical and hospital coverage only, and then independently contracts with another third-party PBM to administer prescription drug coverage, the PBM is the RRE responsible for reporting prescription drug coverage.
The above examples reinforce that the RRE is the entity which has the direct contract with the employer/plan sponsor for prescription drug coverage. While this alert does not introduce new guidance, it serves as a good reminder of the Medicare Section 111 reporting requirements for prescription drug coverage.
Source: NFP BenefitsPartners