Updated 2013 ACA Prescription Drug Fee Calculation & Payment Rules Released; 12/18 Deadline To File Form 8947

December 17, 2012 is the deadline for covered entities to file a Form 8947 as part if its reporting and payment of the Form 8947The Internal Revenue Service (IRS) Notice 2012-74 sets forth the instructions for calculation and reporting branded prescription drug fee for the 2013 fee year under Section 9008 of the Patient Protection and Affordable Care Act, as amended by section 1404 of the Health Care and Education Reconciliation Act of 2010 (Affordable Care Act).

The Act imposes an annual fee on covered entities engaged in the business of manufacturing or importing branded prescription drugs.  The Branded Prescription Drug Fee Regulations in 26 C.F.R. Part 51 published on August 18, 2011 provide the method for calculating each covered entity’s annual fee and the fee year for purposes of these rules and how the fee must be reported and paid.  See  76 Fed. Reg. 51245.  These regulations also define terms for the administration of the fee.

Notice 2012-74/s instructions on the 2013 prescription drug fee discusses:

  • The submission of Form 8947, “Report of Branded Prescription Drug Information,”
  • The time and manner for notifying covered entities of their preliminary fee calculation;
  • the time and manner for covered entities to submit error reports for the dispute resolution; process; and
  • The time for the IRS to notify covered entities of their final fee calculation.

12/18/12 Deadline to File Form 8947

One of the deadlines for this process is rapidly approaching.  Section 51.3T provides that annually, each covered entity may submit a completed Form 8947, “Report of Branded Prescription Drug Information,” in accordance with the instructions for the form. Generally, the form solicits information from covered entities on National Drug Codes, orphan drugs, designated entities, rebates, and other information specified by the form or its instructions. The form is to be filed by the date prescribed in guidance published in the Internal Revenue Bulletin.

Notice 2012-74 sets the deadline for a covered entity that chooses to submit Form 8947 for 2013 at December 17, 2012.

Preliminary Fee Calculation

For the 2013 fee year, the IRS will mail each covered entity a paper notice of its preliminary fee calculation by April 1, 2013. This mailing will include a National Drug Code (NDC) attachment (NDC attachment) that lists the covered entity’s NDCs and the sales data reported to the IRS by each government program pursuant to § 51.4T.

A covered entity may request that the IRS send a CD-ROM with the NDC attachment in Microsoft Excel format. The covered entity must make this request by March 15, 2013. This request must be made either by telephone to Ingrid Taylor at (908) 301-2118 or Mi Lim at (312) 292-3775 (not toll-free calls) or by email to it.bpd.fee@irs.gov. If a covered entity makes this request timely, the IRS will mail the covered entity its notice of preliminary fee calculation on paper and the NDC attachment on paper and CD-ROM by April 1, 2013.

Submitting Error Reports For The Dispute Resolution Process

For the 2013 fee year, a covered entity that chooses to submit an error report regarding its preliminary fee calculation must mail the error report by May 16, 2013.   When the IRS mails each covered entity a notice of its preliminary fee calculation by April 1, 2013, the IRS will also send each covered entity a template on a CD-ROM that the covered entity must use to prepare its error report. All completed templates and the supporting documentation must be submitted on a CD-ROM to the IRS in a timely fashion.

Final Fee Calculation & Payment

The IRS will notify each covered entity of its final fee calculation for 2013 by August 31, 2013. In accordance with § 51.8T(c), each covered entity must pay this fee by September 30, 2013.

For Help With Monitoring Developments, Compliance, Investigations Or Other Needs

If you need help reviewing or commenting on the Tests Procedures or monitoring or responding to these or other health care or health IT related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, can help.  Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, and A Fellow in the American Bar Association, State Bar of Texas and other prominent organizations, Ms. Stamer has more than 24 years experience advising health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health care providers, health plans, their business associates and other health industry clients to set up and administer medical privacy, EHR and other technology and other compliance and risk management policies, to health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. She regularly designs and presents HIPAA and other risk management, compliance and other training for health plans, employers, health care providers, professional associations and others.   

Ms. Stamer also regularly works with OCR and other agencies, publishes and speaks extensively on medical and other privacy and data security, health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.  Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.   For instance, Ms. Stamer for the second year will serve as the appointed scribe for the ABA Joint Committee on Employee Benefits Agency meeting with OCR.  Her insights on HIPAA risk management and compliance often appear in medical privacy and other technology, risk management and compliance-related publications of a broad range of health care, health plan and other industry publications Among others, she has conducted privacy training for the Association of State & Territorial Health Plans (ASTHO), the Los Angeles Health Department, the American Bar Association, the Health Care Compliance Association, a multitude of health industry, health plan, insurance and financial services, education, employer employee benefit and other clients, trade and professional associations and others.

You can get more information about her experience here.

Other Recent Updates & Resources

If you found this information of interest, you also may be interested in the following recent updates on health care, health plan and employee benefits, human resources and other risk management and compliance matters.  Recent examples on health care compliance and risk management matters include:

OIG Recommends CMS, ONC Tighten EMR Incentive Program Rules To Improve Oversight

Congress Sends Bill Amending Lab Testing Rule Violation Sanctions

Learn Latest On OCR New HIPAA De-Identification Guidance & Other HIPAA Developments In 12/12 HIPAA Update Workshop!

$12M+ Settlement Recoveries In 2 Health Care Fraud Whistleblower Claims Shows Providers, Owners, Management & Staff Must Manage Compliance & Risks

Feds Health Fraud Suit Against Psychiatrists Shows Risks Providers Run From Aggressive Referral or Billing Activities

ONC Releases Next Wave of 2014 Draft Test Methods For Public Review and Comment; Plans 11/13 Virtual Workshop

Recent OIG Audit Reports Provide Insights Where Fraud Audits Likely To Look Next

Hospital Chain HCA Inc. Pays $16.5 Million to Settle False Claims Act Allegations That Hospital

Detroit-Area Doctor Charged for Role in Alleged $40 Million Medicare Fraud Scheme

Five More Individuals Charged in Detroit for Alleged Roles in $24.7 Million Medicare Fraud Scheme

Massachusetts Ear Group To Pay $1.5 Million To Resolve HIPAA Charges

Personal Consumer Information Protection In Health Care Operations Topic of Stamer’s 11/1 Speech

ONC Releases First Wave of EHR Test Procedures; More To Come

OCR Releases HIPAA Compliance Training Tool As Enforcement Risks Rise

Health Care Orgs Disability Exposure High As $475K Paid To Settle Justice Department Charges Medical Fitness Screenings of EMTs, Others Violated ADA

HHS/DOJ Partner With Private Health Plans To Further Ramp Up Health Care Fraud Heat!

AHRQ Issues New Guide for Use of Interactive Preventive Care Record

Nextcare Inc. $10 Million False Claims Act Settlement Shows Qui Tam Role In False Claims Act Prosecutions

For more resources and publications training materials by Ms. Stamer, see here.  

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here.  If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to here.

©2012 Cynthia Marcotte Stamer, P.C. nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved.


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