2025 RxDC Reporting Challenges and Best Practices

Prescription Drug Data Collection (“RxDC”) reporting remains a critical compliance requirement in 2025. The requirement, first introduced under the Consolidated Appropriations Act (“CAA”) of 2021, mandates health plans and issuers to report data on prescription drug spending, healthcare costs, and other key metrics to the Centers for Medicare & Medicaid Services (“CMS”). As the reporting landscape evolves, organizations must stay updated on regulatory changes, data requirements, and best practices to ensure compliance.

Overview of RxDC Reporting

RxDC reporting is designed to enhance transparency in healthcare costs and prescription drug pricing. The goal is to help policymakers understand spending trends and improve cost-containment strategies for patients and payers alike.

Who Must Report?

• Health insurance issuers
• Employer-sponsored group health plans (including self-funded and fully insured plans)
• Third-party administrators (“TPAs”) and pharmacy benefit managers (“PBMs”) assisting with data submission

What Must Be Reported?

RxDC reporting includes several categories of data:

• Total healthcare spending (by premium and by drug category)
• Prescription drug costs (top 50 most frequently prescribed, highest cost, and greatest cost increase)
• Rebates and discounts (paid by manufacturers to plans and PBMs)
• Plan benefit structure and cost-sharing information
• Impact of rebates on prescription drug spending
• Breakdown of spending by patient versus payer

Deadlines for 2025

The annual RxDC submission deadline remains June 1, 2025, covering data from the 2024 calendar year. It is crucial for stakeholders to start gathering and verifying data well in advance to avoid compliance issues.

Key Changes in RxDC Reporting for 2025

The reporting framework has evolved since its inception, with the following key updates for 2025:

1. Expanded Data Requirements

• CMS now requires more granular data on prescription drug rebates, particularly focusing on their impact on out-of-pocket costs for patients.
• Additional fields have been added for reporting the costs of specialty drugs and biosimilars.

2. Stronger Enforcement Mechanisms

• Noncompliance may lead to increased financial penalties. CMS has indicated that failure to report accurate and timely data could result in fines per day, per affected entity.
• Employers and issuers must ensure third-party vendors (PBMs and TPAs) are submitting data correctly.

3. More Transparent Reporting on Rebates

• The government is tightening scrutiny over manufacturer rebates, aiming to understand their role in overall drug pricing.
• More detailed reporting on rebate pass-through amounts and their effect on premiums and cost-sharing is now required.

4. Technical Adjustments to Data Submission

• The submission portal has been upgraded to improve data validation and error detection before final submission.
• Organizations must ensure data is formatted correctly to avoid rejection or delays in submission.

Challenges in RxDC Reporting

Despite improvements in the submission process, several challenges remain for health plans, employers, and TPAs:

1. Data Collection Complexity

• RxDC reporting involves integrating data from multiple sources, including insurers, PBMs, and employers. Ensuring consistency across datasets is a significant challenge.
• Employers often rely on multiple vendors, making it difficult to consolidate and verify accurate information.

2. Coordination Between Stakeholders

• Many self-funded plans depend on PBMs and TPAs for reporting, but contractual agreements do not always define clear responsibilities.
• Employers must ensure that their vendors meet CMS requirements and deliver timely reports.

3. Ensuring Data Accuracy

• Reporting errors can trigger compliance risks and potential penalties.
• Organizations need robust internal processes to validate and cross-check financial and prescription drug data.

4. Compliance Risks

• Given the evolving regulatory landscape, staying compliant requires ongoing monitoring of CMS guidance and adjustments to reporting processes.
• Small and mid-sized employers, in particular, may lack the resources to manage compliance effectively.

Best Practices for Successful RxDC Compliance

To navigate these challenges, organizations should adopt the following best practices:

1. Start Early

• Given the June 1 deadline, companies should begin data collection and validation by early Q1.
• Establish a compliance calendar with key milestones to track progress.

2. Clarify Roles and Responsibilities

• Employers should have explicit agreements with PBMs and TPAs outlining data submission responsibilities.
• Conduct periodic check-ins to ensure vendors are on track with compliance obligations.

3. Invest in Data Management Tools

• Utilize automated data aggregation and validation tools to reduce manual errors.
• Establish internal dashboards to track real-time compliance progress.

4. Conduct Internal Audits

• Regularly review data for completeness and accuracy before submission.
• Assign dedicated compliance teams or consultants to oversee the audit process.

5. Stay Informed on Regulatory Changes

• Monitor CMS updates and industry guidance to stay ahead of new reporting requirements.
• Participate in industry forums, webinars, and training sessions to keep compliance teams informed.

6. Leverage Third-Party Expertise

• Engage compliance specialists or legal advisors to review RxDC reports before submission.
• Collaborate with industry groups to share best practices and insights on regulatory expectations.

Conclusion

RxDC reporting continues to evolve in 2025, with expanded data requirements, stricter compliance measures, and increased oversight on prescription drug pricing. Organizations must proactively manage data collection, ensure coordination with vendors, and adopt technology-driven solutions to meet compliance obligations efficiently.

By staying informed, leveraging automation, and implementing strong governance practices, employers and health plans can navigate the complexities of RxDC reporting and avoid costly penalties.

As compliance expectations grow, businesses that prioritize transparency and data accuracy will be better positioned to meet regulatory requirements while contributing to a more transparent healthcare system.