Impacted: Self-insured ERISA groups and health plans serving those groups; Medicare and Medicaid are not impacted

 

What you need to know

As a follow-up to our previous communication regarding the U.S. Department of Labor’s (DOL’s) proposed pharmacy benefit manager transparency rule, we are sharing a brief update on recent federal activity and what it may mean for clients.

Most recently, the proposed rule has moved to the next step in the federal rulemaking process. It is now under review by the Office of Information and Regulatory Affairs (OIRA), a required step before a final rule can be issued.

As the proposal continues to move through federal review, current activity suggests a final rule could be issued before year-end. While the rule is not final or currently enforceable, clients should use this time to assess potential reporting, compliance and implementation implications.

Prime is preparing now to help clients navigate next steps if a final rule is issued, especially if the implementation timeline is short. We remain committed to keeping clients informed and working closely on any actions that may be needed.

What this means

While the rulemaking process continues, it is important to remember:

• OIRA review is the latest milestone, but the rule must still be cleared, finalized and published before any effective date applies.
• Any final requirements would generally become effective no sooner than 60 days after publication.
• Based on that timeline, implementation could not occur until at least early November if a final rule is published in early September; later publication would push timing later.
• Regardless of when the rule is finalized, the DOL may set a later compliance date.

Who may be impacted

As proposed, the DOL rule applies to self-insured group health plans governed by ERISA. It is not expected to apply to insured groups, even those governed by ERISA, or to Medicare or Medicaid lines of business. Prime will continue to assess client impacts as final guidance becomes available.

The proposed rule would require “covered service providers” that contract with a self-insured ERISA group for pharmacy benefit management services to disclose fee and compensation information. Prime or a health plan may be considered a “covered service provider” depending on which entity contracts directly with an ERISA group. This dynamic will create instances where both Prime and health plans work together to complete disclosures.

Prime will continue to assess client impacts as final guidance becomes available.

How Prime is preparing

Although the final requirements are not yet known, Prime has an enterprise readiness effort underway to prepare for the rule’s reporting and disclosure obligations. We are:

• Assessing proposed requirements and potential business, reporting and technology impacts.
• Identifying data, systems and processes needed for future disclosures.
• Developing governance, validation and controls to support reliable reporting.
• Coordinating cross-functional implementation planning and client support.

Looking ahead

Prime will continue to monitor federal activity, evaluate new guidance and share updates as more information becomes available.

As the federal rulemaking process evolves, Prime will engage clients over the coming weeks to provide more detailed expectations and a recommended approach for meeting compliance requirements. Through our account management team, we will work with clients to discuss how data can be compiled within existing systems to support those efforts.

We appreciate your partnership as we work together to prepare for potential next steps.

Questions

Please contact your Prime account team representative with any questions.