MEDICARE PRESCRIPTION DRUG BENEFIT
Solicitation for Applications for New Prescription Drug Plans (PDP) Sponsors
2011 Contract Year
PUBLIC REPORTING BURDEN: According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0938-0936. The time required to complete this information collection is estimated to average 40.00 hours per response, including the time to review instructions, search existing data resources, and gather the data needed, and complete and review the information collection. If you have any comments concerning the accuracy of the time estimate(s) or suggestions for improving this form, please write to: CMS, 7500 Security Boulevard, C4-26-05, Baltimore, Maryland 21244-1850
1.1. Purpose of Solicitation 7
1.3. Objectives and Structure 7
1.5. Summary of Part D Sponsor Role and Responsibilities 9
1.6. Summary of CMS Role and Responsibilities 10
1.6.1. Application Approval, Part D Bid Review, and Contracting Processes 10
1.6.2. Part D Program Oversight 11
1.6.3. Education and Outreach 12
1.6.4. Marketing Guidelines and Review 12
1.6.5. Eligibility for the Low Income Subsidy Program 12
1.6.6. General Enrollment Processing 1312
1.6.7. Payment to Part D Sponsors 13
2.2. Other Technical Support 14
2.3. Health Plan Management System (HPMS) Data Entry 14
2.4. Instructions and Format of Qualifications 14
2.4.2. Applicant Seeking to Offer New Employer/Union-Only Group Waiver Plans (EGWPs) 16
New PDP Sponsors Offering Individual and “800 Series” Plans – Pharmacy Access 17
New PDP Sponsors Only Offering “800 Series” Plans – Pharmacy Access 17
2.4.3. Applicant Seeking to Offer New Employer/Union Direct Contract PDPs 17
2.4.4. Applicant Entity Same as Contracting Entity 18
2.4.5. Joint Enterprise as Applicant and Contracting Entity 18
2.4.6. Automatic Enrollment of Full-benefit Dual Eligible Individuals 19
2.4.7. Withdrawal of a Part D Application 19
2.4.8. Technical Assistance 19
2.5. Submission Software Training 19
2.6. System Access and Data Transmissions with CMS 20
2.6.2. Enrollment and Payment 20
2.6.3. Payment – Part D Sponsors 21
2.7. Summary Instruction and Format for Individual Market Bids 21
2.7.3. Overview of Bid Negotiation 23
2.8.1. Retail Pharmacy Access 23
2.8.2. Home Infusion Pharmacy Access 24
2.8.3. Long-Term Care Pharmacy Access 25
2.8.4. Indian Tribe and Tribal Organization, and Urban Indian Organization (I/T/U) 25
2.8.5. Waivers Related to Pharmacy Access 25
2.9. Waivers Related to Attestations for PDP EGWP and PDP Direct Contract Applicants 2625
2.10. Standard Contract with PDP Sponsors 26
2.11. Protection of Confidential Information 26
3.1. Applicant Experience, Contracts, Licensure and Financial Stability 2827
3.1.1. Management and Operations 42 CFR Part 423 Subpart K 2827
3.1.2. Experience and Capabilities 3533
3.1.3. Licensure and Solvency 42 CFR Part 423, Subpart I; 2008 Call Letter 3634
3.1.4. Business Integrity 2 CFR Part 376; Prescription Drug Benefit Manual, Chapter 9 3835
3.2.6. Bids 42 CFR Part 423 Subpart F; 2008 Call Letter 5148
3.3. Service Area/Regions 42 CFR §423.112; Prescription Drug Benefit Manual, Chapter 5 5149
3.4. General Pharmacy Access 42 CFR §423.120(a); Prescription Drug Benefit Manual, Chapter 5 5249
3.4.2. Out of Network Access 42 CFR §423.124; Prescription Drug Benefit Manual, Chapter 5 5654
3.4.3. Mail Order Pharmacy 42 CFR §423.120(a)(10); Prescription Drug Benefit Manual, Chapter 5 5755
3.4.7. Specialty Pharmacy Prescription Drug Benefit Manual, Chapter 5 6260
3.8. Grievances 42 CFR Part 423 Subpart M; Prescription Drug Benefit Manual, Chapter 18 6765
3.14. Provider Communications Prescription Drug Benefit Manual, Chapter 2 8077
3.15. Compliance Plan 42 CFR §423.504(b)(4)(vi); Prescription Drug Benefit Manual, Chapter 9 8178
3.16. Reporting Requirements 42 CFR §423.514; 2010 Reporting Requirements 8381
3.17. Data Exchange between Part D Sponsor and CMS 42 CFR §423.505(c) and (k) 8683
3.20. Record Retention 42 CFR §423.505(d) 8986
3.22. Claims Processing; CMS issued guidance 04/26/2006 9088
3.23. Premium Billing 42 CFR §423.293, CMS issued guidance 03/08/2007 9390
3.24. Consumer Assessment Health Providers Survey (CAHPS) Administration 2010 Call Letter 9390
APPENDIX I – Attestation for Employer/Union-Only Group Waiver Plans (800-Series) 9895
APPENDIX II—Direct Contract PDP Attestation 103100
APPENDIX III -- Part D Financial Solvency & Capital Adequacy Documentation 107104
APPENDIX IV – Federal Waiver of State Licensure 116113
(for individual market applicants only) 124121
APPENDIX VII -- Crosswalk for Retail Pharmacy Access Contracts 137134
APPENDIX VIII -- Crosswalk for Mail Order Pharmacy Access Contracts 140137
APPENDIX IX -- Crosswalk for Home Infusion Pharmacy Access Contracts 143140
APPENDIX X -- Crosswalk for Long-Term Care Pharmacy Access Contracts 146143
APPENDIX XII -- Applicant Submission of P&T Committee Member List and Certification Statement 156153
APPENDIX XIII -- Retail Pharmacy Network Access Instructions 161158
The Centers for Medicare & Medicaid Services is seeking applications from qualified entities to enter into contracts to offer Medicare Prescription Drug Plans (PDPs) as described in the Medicare Prescription Drug Benefit Final Rule published in the Federal Register on January 28, 2005 (70 Fed. Reg.4194). Please submit your applications according to the process described in Section 2.0.
If your organization, or your parent or affiliated organization is already under a PDP contract with CMS to offer the Part D benefit, and you are expanding your service area offered under the existing contract please refer to the www.cms.hhs.gov/ website for the Part D Service Area Expansion application for instructions to complete an application for a Service Area Expansion (SAE). If your organization, or your parent or affiliated organization already has a Medicare Advantage – Prescription Drug (MA-PD) or Cost Plan contract with CMS to offer the Part D benefit, and you are seeking a PDP contract, you are required to complete this PDP application package.
The Medicare Prescription Drug Benefit program was established by section 101 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) and is codified in sections 1860D-1 through 1860 D-42 of the Social Security Act (the Act). Section 101 of the MMA amended Title XVIII of the Social Security Act by redesignating Part D as Part E and inserting a new Part D, which establishes the Voluntary Prescription Drug Benefit Program (hereinafter referred to as “Part D”).
Effective January 1, 2006, MMA established an optional prescription drug benefit, known as the Part D program for individuals who are entitled to Medicare Part A and/or enrolled in Part B.
In general, coverage for the prescription drug benefit is provided predominantly through prescription drug plans (PDPs) that offer drug-only coverage, or through Medicare Advantage (MA) plans that offer integrated prescription drug and health care coverage (MA-PD plans). PDPs must offer a basic drug benefit and may also offer an enhanced or alternative basic drug benefit. MA-PD sponsors must offer either a basic benefit, or broader coverage for no additional cost. If the MA-PD sponsor meets the basic requirement, then it may also offer supplemental benefits through enhanced alternative coverage for an additional premium. Medicare Cost Plans may, at their election, offer a Part D drug plan as an optional supplemental benefit, subject to the same rules that apply to an MA-PD plan. Program of All-Inclusive Care for the Elderly (PACE) organizations may elect to offer a Part D plan in a similar manner as MA-PD local sponsors in order to account for the shift in payor source from the Medicaid capitation rate to a private Part D Sponsors.
Applicants who offer either a PDP or MA-PD plan may offer national plans (with coverage in every region) or regional plans. MA-PD plan applicants may also offer local plans. CMS has identified 26 MA Regions and 34 PDP Regions; in addition, each territory is its own PDP region. Additional information about the regions can be found on the www.cms.hhs.gov/ website.
This solicitation is only for entities seeking to operate a PDP (either in the individual market, employer market or a combination of both markets). Separate Part D solicitations are also posted on the CMS website for entities offering MA Plans with a Part D Drug benefit at the local or regional levels and for entities offering Cost Plans with a Part D benefit, and for entities offering PACE Plans with a Part D benefit. Reference throughout this solicitation will be made to Part D Sponsor which is meant to encompass stand-alone PDPs; MA Plans with a Part D benefit and Cost Plans with a Part D benefit.
Part D Sponsors will have flexibility in terms of benefit design. This flexibility includes, but is not limited to, authority to establish a formulary that designates specific drugs that will be available within each therapeutic class of drugs, and the ability to have a cost-sharing structure other than the statutorily defined structure (subject to certain actuarial tests). (Sponsors are required to follow our formulary guidance. See Section 2.8.1 of this application for information regarding the submission of formulary materials). The plans also may include supplemental benefits coverage such that the total value of the coverage exceeds the value of basic prescription drug coverage.
APPLICATION REVIEW PROCESS
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Date |
Milestone |
November 17, 2009 |
Submit Notice of Intent to Apply Form to CMS |
December 2, 2009 |
CMS User ID form due to CMS |
January 5, 2010 |
Final Applications posted by CMS |
February 25, 2010 |
Applications due |
March 29, 2010 |
Release of Health Plan Management System (HPMS) formulary submissions module |
April 9, 2010 |
Plan Creation module, Plan Benefit Package (PBP), and Bid Pricing Tool (BPT) available on HPMS |
April 19, 2010 |
Formulary submission due to CMS Transition Attestations due to CMS |
May/June 2010 |
CMS sends Part D contract eligibility determination to Applicants, based on review of application. Applicant’s bids must still be negotiated (see below) |
May 21, 2010 |
PBP/BPT Upload Module available on HPMS |
June 7, 2010 |
All bids due |
Early August 2010 |
CMS publishes national average Part D premium |
September 2010 |
CMS completes review and approval of bid data. CMS executes Part D contracts to those organizations who submit an acceptable bid |
November 15, 2010 |
2011 Annual Coordinated Election Period begins |
NOTE: This timeline does not represent an all-inclusive list of key dates related to the Medicare Prescription Drug Benefit program. CMS reserves the right to amend or cancel this solicitation at any time. CMS also reserves the right to revise the Medicare Prescription Drug Benefit program implementation schedule, including the solicitation and bidding process timelines.
Key aspects of each Part D Sponsor shall include the ability to:
Submit a formulary (considered an element of the bid) each year for CMS approval.
Submit a Part D Sponsor plan bid each year for CMS approval.
Enroll all eligible Medicare beneficiaries who apply and reside within the Part D Sponsor’s approved service area. A sponsor must serve at least one entire region.
Administer the Part D benefit (consistent with the Part D Sponsor’s approved bid),including providing coverage for drugs included in a CMS-approved formulary, administering appropriate deductibles and co-payments, managing the benefit using appropriate pharmacy benefit managerial tools, and operating effective oversight of that benefit.
Provide access to negotiated prices on covered Part D drugs, with different strengths and doses available for those drugs, including a broad selection of generic drugs.
Ensure that records are maintained in accordance with CMS rules and regulations and that both records and facilities are available for CMS inspection and audit.
Disclose the information necessary for CMS to oversee the program and ensure appropriate payments.
Offer a contracted retail pharmacy network, providing convenient access to retail pharmacies.
Process claims at the point of sale.
Operate quality assurance, drug utilization review, and medication therapy management programs.
Administer coverage determinations, grievances, exceptions, and an appeals process consistent with CMS requirements.
Provide customer service to beneficiaries, including enrollment assistance, toll-free telephone customer service help, and education about the Part D benefit.
Protect the privacy of beneficiaries and beneficiary-specific health information.
Develop marketing materials and conduct outreach activities consistent with CMS standards.
Develop and/or maintain systems to support enrollment, provide claims-based data to CMS, accept CMS payment (including subsidies for low-income beneficiaries), track true out-of-pocket costs and gross covered prescription drug costs, coordinate benefits with secondary insurers (or primary insurers when Medicare is secondary) and support e-prescribing.
Provide necessary data to CMS to support payment (including Prescription Drug Event (PDE) records and data on direct and indirect remuneration), oversight, and quality improvement activities and otherwise cooperate with CMS oversight responsibilities.
Provide accurate drug pricing and pharmacy network data that will be published on the Medicare Prescription Drug Plan Finder tool. Sponsors must submit data based on the format and schedule provided by CMS.
There are three distinct phases to the overall review to determine whether CMS will enter into a contract with an Applicant. The first phase is the application review process. CMS will review all applications submitted on or by February 25, 2010 to determine whether the Applicant meets the qualifications we have established to enter into a Part D contract.
The second phase has two steps – the formulary upload which begins March 29, 2010 and the bid upload which begins May 21, 2010. The formulary review entails determining that the proposed formulary (if one is used) has at least two drugs in every therapeutic category and class (unless special circumstances exist that would allow only one drug); does not substantially discourage enrollment by certain types of Part D eligible individuals; includes adequate coverage of the types of drugs most commonly needed by Part D enrollees; and includes an appropriate transition policy. CMS will contact Applicants if any issues are identified during the review for discussion and resolution. The intent is to provide an opportunity for Applicants to make any necessary corrections prior to the Part D bid submission date which is on the first Monday in June each year. The second step involves the bid review and negotiations with applicants to ensure valuations of the proposed benefits are reasonable and actuarially equivalent.
The third phase involves contracting. Applicants judged qualified to enter into a Part D contract as a result of successfully completing phase one and two will be offered a Part D contract by CMS.
CMS has developed a Medicare Prescription Drug Benefit program monitoring system to ensure that the Part D sponsors deliver good value through defined benefits and are compliant with program requirements. We focus on several operational areas critical to the value of the benefit, including beneficiary access to and satisfaction with their Part D benefit and protection of the financial integrity of the program. Specific areas include pharmacy access, adequacy and value of the benefit, benefit management, enrollment and disenrollment, marketing, program safeguard activities, customer service, confidentiality and security of enrollee information, and effectiveness of tracking true out-of-pocket costs and gross covered prescription drug costs. The types of reporting that CMS requires of Part D sponsors are presented in the application. For additional information on reporting requirements, refer to the www.cms.hhs.gov/ website. (NOTE: Part D sponsors, as covered entities under the Health Insurance Portability and Accountability Act of 1996, are subject to investigation and penalties for findings of HIPAA violations as determined by the Department of Health and Human Services Office for Civil Rights and the Department of Justice.)
We monitor compliance through the analysis of data we collect from Part D sponsors, CMS contractors, and our own systems. The types of data we collect from sponsors include: certain benefit data, PDE records, direct and indirect remuneration data, cost data, benefit management data, marketing review information, customer satisfaction and complaints data, and information used to determine low-income subsidy (LIS) match rates. We also conduct beneficiary satisfaction surveys and operate a complaints tracking system to monitor and manage complaints brought to our attention that are not satisfactorily resolved through PDP sponsors’ grievance processes as well as conduct periodic site visits to verify PDP sponsor compliance with Part D program requirements. We use information from all the specified sources to analyze the appropriateness and value of the benefit delivered, and to evaluate the opportunity for additional value and quality improvement. We publish the results of our monitoring activities on CMS’ websites, including performance ratings on the Medicare Prescription Drug Plan Finder, and we also post information regarding the issuance of Corrective Action Plans on our website.
If any trends we identify indicate contract violations, significant departures from the marketed Part D offering, or fraud or other violations of State or Federal laws, appropriate action is taken consistent with 42 CFR §423.509 and Part 423, Subpart O. We also make referrals if appropriate to the Services Office of the Inspector General or to Federal and State authorities where violations of laws under the jurisdictions of these agencies are in question.
CMS is committed to educating Medicare beneficiaries about the Part D program. CMS plans to continue to educate beneficiary and consumer groups, health care providers, States, and other interested groups about the Part D program. Among the topics discussed with these groups is the identification and reporting of possible fraud and/or abuse. CMS also engages in other activities that publicize or otherwise educate beneficiaries about the program. For example, the Medicare Prescription Drug Plan Finder assists beneficiaries in finding a plan to meet their specific needs; refer to the www.medicare.gov/MPDPF website. CMS displays data that allow comparisons of plans’ costs, quality and operational performances. As described above, these data may also be used for monitoring purposes.
Marketing Guidelines are posted on the www.cms.hhs.gov/ website. Part D sponsors are required to adhere to these guidelines in developing their marketing materials and marketing strategy. Part D sponsors are required to submit materials to CMS based on the marketing guidelines.
Low-income Medicare beneficiaries receive full or partial subsidies of premiums and reductions in cost sharing under the Part D benefit. Certain groups of Medicare beneficiaries are automatically eligible for the low-income subsidy program. These beneficiaries include Medicare beneficiaries who are full-benefit dual eligible individuals (eligible for full benefits under Medicaid), Medicare beneficiaries who are recipients of Supplemental Security Income benefits; and participants in Medicare Savings Programs as Qualified Medicare Beneficiaries (QMBs), Specified Low-Income Medicare Beneficiaries (SLMBs), and Qualifying Individuals (QIs). Beneficiaries who are low-income and who do not fall into one of the automatic subsidy eligibility groups apply for a low-income subsidy and have their eligibility determined by either the state in which they reside or the Social Security Administration (SSA). CMS has developed a database to track individuals who are automatically deemed subsidy-eligible or who are determined subsidy-eligible by states or SSA, and communicates the names and eligibility category of those individuals to Part D sponsors as part of the enrollment files from the enrollment processing system described below. Occasionally, due to time lags, CMS’s database does not reflect a low-income subsidy eligible individual true maximum cost sharing amount under the program or an individual’s correct low-income subsidy status. Part D Sponsors are required to adhere to CMS’s Best Available Evidence policy under 42 CFR §423.800(d)586, under which an individual can provide acceptable evidence supporting a revised cost-sharing amount that the sponsor must accept for the purpose of administering the benefit. For additional information regarding the low income subsidy program, refer to the www.cms.hhs.gov/ website.
CMS has a system to receive and process enrollment, disenrollment and membership information provided by Part D sponsors. CMS tracks enrollments and ensures that the beneficiary does not enroll in more than one Part D plan. Also, CMS tracks low-income subsidy status and auto-enrollments of full-benefit dual eligible individuals into Part D plans and facilitated enrollments for other low-income Medicare beneficiaries. Finally, CMS tracks disenrollments from Part D plans and will deny new enrollments during any given year unless the enrollment occurs during an allowable enrollment period. For additional information regarding enrollment processing, refer to the www.cms.hhs.gov/ website.
CMS provides payment to Part D sponsors in the form of advance monthly payments (consisting of the Part D Sponsor plan’s standardized bid, risk adjusted for health status, minus the beneficiary monthly premium), estimated reinsurance subsidies, and estimated low-income subsidies (low-income cost sharing subsidies and premiums). After the end of the payment year, CMS reconciles the actual amounts of low-income cost sharing subsidies and reinsurance amounts reported on PDE records against the amount paid as a part of the prospective monthly payments. Risk sharing amounts (if applicable) are determined after all other reconciliations have been completed. For a more complete description refer to CMS’ prescription drug event reporting instructions that are posted at www.csscoperations.com and on the www.cms.hhs.gov website.
There are six types of entities with which CMS contracts to offer the Medicare prescription drug benefit: PDP sponsors, Medicare Advantage organizations that offer MA-PDs (including local HMO plans, local, PPOs, regional PPOs, and Private Fee-for-Service plans); organizations with Cost Plans under section 1876 of the Social Security Act, Employer Groups, and PACE organizations. This application is to be completed only by entities seeking to offer new PDPs during 2011 in either the individual and/or employer markets.
CMS conducts technical support calls, also known as User Group calls, for Applicants and existing Part D sponsors. CMS operational experts (e.g., from areas such as enrollment, information systems, marketing, bidding, formulary design, and coordination of benefits) are available to discuss and answer questions regarding the agenda items for each meeting. Registration for the technical support calls and to join the list serve to get updates on CMS guidance can be found at www.mscginc.com/Registration/.
CMS also conducts special training sessions, including a user group call dedicated to addressing issues unique to sponsors that are new to the Part D program.
Part D organizations that submit a Notice of Intent to Apply form are assigned a pending contract number (S number) to use throughout the application and subsequent operational processes. Once the contract number is assigned, Part D Applicants apply for and receive their CMS User ID(s) and password(s) for HPMS access and need to input contact and other related information into the HPMS (see section 3.1.5). Applicants are required to provide prompt entry and ongoing maintenance of data in HPMS. By keeping the information in HPMS current, the Applicant facilitates the tracking of their application throughout the review process and ensures that CMS has the most current information for application updates, guidance and other types of correspondence.
In the event that an Applicant is awarded a contract, this information will also be used for frequent communications during implementation. Therefore, it is important that this information be accurate at all times.
Applications may be submitted until February 25, 2010. Applicants must use the 2011 solicitation. CMS will not accept or review in anyway those submissions using the prior versions of the solicitation, including the use of CMS provided templates from prior years (e.g. 2010 and earlier).
Applicants will complete the entire solicitation via HPMS.
In preparing your application in response to the prompts in Section 3.0 of this solicitation, please mark “Yes” or “No” or “Not Applicable” in sections organized with that format within HPMS.
In many instances Applicants are directed to affirm within HPMS that they will meet particular requirements by indicating “Yes” next to a statement of a particular Part D program requirement. By providing such attestation, an Applicant is committing its organization to complying with the relevant requirements as of the date your contract is signed, unless an alternative date is noted in Section 3.0.
CMS will not accept any information in hard copy. If an Applicant submits the information via hard copy, the application will not be considered received.
Organizations will receive a confirmation number from HPMS upon clicking final submit. Failure to obtainhave a confirmation number indicates that an applicant failed to properly submit itstheir Part D application by the CMS-established deadline. Any entity that experiences technical difficulties during the submission process must contact the HPMS Help Desk and CMS will make case by case determinations where appropriate regarding the timeliness of the application submission.
CMS will check the application for completeness shortly after its receipt. Consistent with the 2010 Call Letter, CMS will make determinations concerning the validity of each organization’s submission. Some examples of invalid submissions include but are not limited to the following: Applicants that fail to upload executed agreements or contract templates, Applicants that upload contract crosswalks instead of contracts, or Applicants that fail to upload any pharmacy access reports. CMS will notify any Applicants that are determined to have provided invalid submissions.
For those Applicants with valid submissions, CMS will notify your organization of any deficiencies and afford a courtesy opportunity to amend the applications. CMS will only review the last submission provided during this courtesy cure period.
CMS will provide communication back to all Applicants throughout the application process via email. The email notifications will be generated through HPMS, so organizations must ensure that the Part D application contract information provided through the “Notice of Intent to Apply” process is current and correct, and that there are no firewalls in place that would prevent an email from the hpms@cms.hhs.gov web address from being delivered.
CMS has established that all aspects of the program that the Applicant attests to must be ready for operation by the contract signature date. As with all aspects of a Part D sponsor’s operations under its contract with CMS, we may verify a sponsor’s compliance with qualifications it attests it will meet, through on-site visits at the Part D sponsor’s facilities as well as through other program monitoring techniques. Failure to meet the requirements attested to in this solicitation and failure to operate its Part D plan(s) consistent with the requirements of the applicable statutes, regulations, call letter, and the Part D contract may delay a Part D sponsor’s marketing and enrollment activities or, if corrections cannot be made in a timely manner, the Part D sponsor will be disqualified from participation in the Part D program.
An individual with legal authority to bind the Applicant shall execute the certification found in Section 4.0. CMS reserves the right to request clarifications or corrections to a submitted application. Failure to provide requested clarifications within the time period specified by CMS for responding could result in the applicant receiving a notice of intent to deny the application, in which case, the Applicant will then have 10 days to seek to remedy its application. The end of the 10-day period is the last opportunity an Applicant has to provide CMS with clarifications or corrections. CMS will only review the last submission provided during this cure period. Such materials will not be accepted after this 10-day time period.
This solicitation does not commit CMS to pay any cost for the preparation and submission of an application.
CMS will not review applications received after 11:59 P.M. Eastern Standard Time on February 25, 2010. CMS will lock access to application fields within HPMS as of this time. CMS will not review any submissions based on earlier versions of the solicitation. Applicants must complete the 2011 solicitation in order to be considered for Part D sponsorship.
If a subsidiary, parent, or otherwise related organization is also applying to offer Part D benefits, these entities MUST submit separate applications. There are four types of Part D solicitations for which applications are due on February 25, 2010; they are PDP, MA-PD, Cost Plan solicitations, and the Service Area Expansion Application. Organizations that intend to offer more than one of these types of Part D contracts must submit a separate application for each type. (PACE sponsors will also have separate solicitations). For example, a MA-PD and PDP product may not be represented in the same application. Entities intending to have both local MA-PD and Regional PPO contracts must submit separate MA-PD applications.
All new PDP Sponsor Applicants seeking to offer new “800 series” EGWPs – with or without corresponding individual plans, including applicants that have not previously applied to offer plans to individual beneficiaries or “800 series” EGWPs must complete the appropriate EGWP attestation provided in Appendix I. The Appendix provides the Applicant with the ability to choose between only offering “800 series” plans and participating in both the individual and group markets. The attestation provided in Appendix I specify those individual market requirements that are not applicable in the employer market.
New PDP Sponsor Applicants and existing PDP Sponsors will be able to enter their EGWP service areas directly into HPMS during the application process (refer to HPMS User Guide). PDP Sponsor Applicants may provide coverage to employer group members wherever they reside (i.e., nationwide). However, in order to provide coverage to retirees wherever they reside, PDP Applicants must set their service area to include all areas where retirees reside during the plan year (i.e., set national service areas).
PDP Sponsors offering both individual and “800 series” plans are not required to submit separate GeoNetworks® retail pharmacy reports (Appendix X- Retail Pharmacy Network Access Instructions) or other pharmacy access submittals (mail order, home infusion, long-term care, I/T/U) for their “800 series” service areas in addition to those required to be submitted for their individual plan service areas. PDP sponsors will not initially be required to have retail and other pharmacy networks in place for those designated EGWP service areas outside of their individual plan service areas. However, in accordance with employer group waiver pharmacy access policy, pharmacy access sufficient to meet the needs of enrollees must be in place once the PDP Sponsor enrolls members of an employer or union group residing in particular geographic locations outside of its individual plan service area.
PDP sponsors that intend to only offer “800 series” plans (i.e., no plans will be offered to individual Medicare beneficiaries under this contract number) will be required to submit retail and other pharmacy access information (mail order, home infusion, long-term care, I/T/U) for the entire defined EGWP service area during the application process and demonstrate sufficient access in these areas in accordance with employer group waiver pharmacy access policy.
New Direct Contract PDP Applicants will be able to enter their service area directly into HPMS during the application process.
In general, Part D sponsors can only cover beneficiaries in the service areas in which they are licensed and approved by CMS to offer benefits. CMS has waived these requirements for Direct Contract PDP Sponsors. Direct Contract PDP Sponsors can extend coverage to all of their retirees, regardless of whether they reside in one or more PDP regions in the nation. In order to provide coverage to retirees wherever they reside, Direct Contract PDP Applicants must set their service areas to include all areas where retirees may reside during the plan year.
Direct Contract PDP applicants are required to submit retail and other pharmacy access information for the entire defined service area during the application process and demonstrate sufficient access in these areas in accordance with employer group waiver pharmacy access policy.
Those employers or unions seeking to directly contract with CMS to become PDP Sponsors for their Medicare-eligible retirees must complete the following materials:
The 2011 Solicitation for Applications for New Prescription Drug Plan Sponsors
Appendix III-- 2011 Part D Financial Solvency & Capital Adequacy Documentation for Direct Contract PDP Sponsor Applicants
Appendix II—2011 Direct Contract PDP Attestation
The legal entity that submits this application must be the same entity with which CMS enters into a Part D contract, or in the case of an MA-PD and Cost Plan sponsor, the same legal entity seeking an addendum to an MA or Cost Plan contract. An entity that qualifies for a Part D contract, or for an addendum to an MA or Cost Plan contract, may hold multiple contracts for the same plan type (e.g. PDP, MA-PD, or Cost Plan) in the service area described in the application.
CMS will recognize as Applicants those joint enterprises formed by agreement among multiple state-licensed organizations (or organizations that have applied to CMS for a licensure waiver) for the purpose of administering a Medicare Prescription Drug Plan in at least one entire PDP region. Each member of the joint enterprise will be contractually liable to CMS for the administration of the Part D benefit in the State(s) in which it is licensed or for which it has received a CMS licensure waiver.
The joint enterprise need submit only one application on behalf of the enterprise’s member organizations and such application shall represent the joint enterprise’s commitment to offering a uniform benefit in each PDP region in which it will offer Part D benefits. However, the information requested in Section 3.1 of this solicitation must be provided for each member of the joint enterprise with separate accompanying Appendices as necessary. For example, each joint enterprise member must provide identifying information about its organization, copies of its executed contracts with entities performing critical tasks related to the delivery of the Part D benefit, and information related to its business integrity. The responses provided in the remainder of the application may be made once by the joint enterprise applicant and will be considered binding on each member of the joint enterprise. Also, a separate certification statement, shown in Section 4.0, must be provided for each joint enterprise member organization. Each certification statement must be signed by an individual specifically granted the authority to bind the member organization.
Joint enterprise applicants are required to submit to CMS for approval a copy of the executed agreement among the joint enterprise member organizations. Please see Section 3.1.2.G, for instructions concerning this requirement.
Upon CMS’ determination that the members of the joint enterprise are qualified to enter into a Part D contract and approval of the bid(s) submitted by the joint enterprise, CMS will enter into a multiple-party contract signed by authorized representatives of CMS and each member of the joint enterprise.
As provided for in section 42 CFR §423.34(d) of the regulations, individuals who are dually eligible for Medicare and full Medicaid benefits, and who fail to enroll in a Part D plan, will be enrolled automatically in a plan with a beneficiary premium that does not exceed the low-income premium subsidy amount. If there is more than one PDP with a premium that meets this description, CMS will enroll the beneficiaries in those PDPs, on a random basis.
For this purpose, CMS will count the Applicant and its parent and affiliates as a single PDP, regardless of how many of those entities have bids that are at or below the low income subsidy threshold.
Applicants eligible to receive auto-enrolled and reassigned beneficiaries as a result of the price of their approved bid(s) may expect a readiness audit from CMS. These audits are conducted to verify that all systems and processes are in place to ensure the Applicant is prepared to receive enrollments. In those instances where an Applicant fails to pass the readiness audit, CMS will not allow auto-enrollments or reassignments to occur until such time as CMS is satisfied that all systems and processes are properly in place.
In those instances where an organization seeks to withdraw its application or reduce the service area of a pending application prior to the execution of a Part D contract, then the organization must send an official notice to CMS. The notice should be on organization letterhead and clearly identify the pending application number and service area (as appropriate). The notice should be delivered via email to drugbenefitimpl@cms.hhs.gov and should entitle the subject line of the email should read “Pending application withdrawal or reduction to pending service area.” The withdrawal will be considered effective as of the date of the requested letter.
For technical assistance in the completion of this Application, contact:
Marla Rothouse by email at marla.rothouse@cms.hhs.gov, or by phone at 410-786-8063 or Linda Anders by email at linda.anders@cms.hhs.gov, or by phone at 410-786-0459. As stated in section 2.4.1, Applicants must contact the HPMS Help Desk if they are experiencing technical difficulties in uploading or uploading completing any part of this solicitation within HPMS prior to the submission deadline.
Applicants use the CMS Health Plan Management System (HPMS) during the application, formulary, and bid processes. Applicants are required to enter contact and other information collected in HPMS in order to facilitate the application review process.
Applicants are required to upload their plan formularies to HPMS using a pre-defined file format and record layout. The formulary upload functionality will be available on March 29, 2010. The deadline for formulary submission to CMS is 11:59 PM EDT on April 19, 2010. CMS will use the last successful upload received for an Applicant as the official formulary submission.
In order to prepare plan bids, Applicants will use HPMS to define their plan structures and associated plan service areas and then download the Plan Benefit Package (PBP) and Bid Pricing Tool (BPT) software. For each plan being offered, Applicants will use the PBP software to describe the detailed structure of their Part D benefit and the BPT software to define their bid pricing information. The formulary must accurately crosswalk to the PBP.
Once the PBP and BPT software has been completed for each plan being offered, Applicants will upload their bids to HPMS. Applicants will be able to submit bid uploads to HPMS on their PBP or BPT one or more times between May 21, 2010 and the CY 2011 bid deadline of June 7, 2010. CMS will use the last successful upload received for a plan as the official bid submission.
CMS will provide technical instructions and guidance upon release of the HPMS formulary and bid functionality as well as the PBP and BPT software. In addition, systems training will be available at the Bid Training in April 2010.
Part D sponsor organizations will use HPMS to communicate with CMS in support of the application process, formulary submission process, bid submission process, ongoing operations of the Part D program, and reporting and oversight activities. Part D applicants are required to secure access to HPMS in order to carry out these functions.
All Part D sponsors must submit information about their membership to CMS electronically and have the capability to download files or receive electronic information directly. Prior to the approval of your contract, Part D sponsors must contact the MMA Help Desk at 1-800-927-8069 for specific guidance on establishing connectivity and the electronic submission of files. Instructions are also on the MMA Help Desk web page, www.cms.hhs.gov/mmahelp, in the Plan Reference Guide for CMS Part C/D systems link. The MMA Help Desk is the primary contact for all issues related to the physical submission of transaction files to CMS.
Daily, weekly and monthly, CMS provides responses to Sponsor submitted information and reports to each Part D sponsor for each of their plans with member and plan-level information. Part D sponsors must compare the membership and payment information in those reports on an ongoing basis with their records and report any discrepancies to CMS according to the instructions provided by CMS for that purpose. Each Part D Sponsor must complete and submit the monthly CEO certification of enrollment data by the due date each month. The due date is provided in the Plan Monthly MARx Calendar, which is updated annually. Definitive information about the format and submission of files, as well as the MARx calendar, can be found in the Plan Communications User’s Guide (available at www.cms.hhs.gov/MedicareMangCareSys/). The MMA Help Desk also provides additional system and technical information at www.cms.hhs.gov/mmahelp/.
Payments will be wired to sponsor accounts on the first day of each month (or the last business day of the prior month if the first day of the month is not a business day). The monthly payment includes premiums that SSA or other agencies are deducting from beneficiary Social Security payments or other payments as well as those premiums CMS is paying on behalf of low-income individuals. Estimated monthly reinsurance subsidies, and low-income subsidies are also included.
Each Part D Applicant must submit to CMS a bid for each prescription drug plan it intends to offer. Applicants using this solicitation may apply to offer full or limited risk plans. CMS reviews bids for limited risk plans only in those regions where there are not at least two prescription drug plans, one of them being a PDP plan. Note, that only PDP sponsor Applicants and not MA organizations may submit a bid to be limited risk. Furthermore, in the event a PDP region does not have two prescription drug plans, CMS will approve at a maximum two partial risk plans. (Please note that Applicants that indicate in their applications that they intend to offer limited risk plans are not precluded from later submitting full risk bids, but a PDP sponsor Applicant that does submit a limited risk bid must apply the same limitation of risk to all PDPs offered by the sponsor in the PDP region). Where there are not at least two plans offering qualified prescription drug coverage, one of them being a PDP plan, CMS will contract with entities to offer fallback plans. Applicants must submit their formularies to HPMS on or before April 19, 2010 and the PBPs and BPTs on or before the bid submission date.
Bid-Related Sections Due Prior to Bid Submission Date
To facilitate the timely review of all the bid submissions, CMS requires Applicants to submit the portion of their bid related to formulary and covered drugs from March 29- April 19, 2010. CMS reviews areas of each proposed drug plan formulary by tier and drug availability and evaluates each element against evidence-based standards such as widely accepted treatment guidelines. Elements include, but may not be limited to the list of drugs, the categories and classes, tier structures (not cost sharing), and utilization management tools such as quantity limits, step therapy, and prior authorization. CMS makes the review criteria available to Applicants well in advance of the date Applicants must submit this information to CMS. Outliers are selected for further evaluation during the formulary review process prior to CMS approval of the bid. CMS makes reasonable efforts to inform Applicants of their outliers so that they may substantiate their offering. If such substantiation is not satisfactory to CMS, the Applicant is given the opportunity to modify the formulary. CMS intends to complete as much of this work as possible before the PBP and BPT submissions so that any modification may be reflected in those documents.
Bid Submissions
The Applicant’s bid represents the expected monthly cost to be incurred by the Applicant to providefor qualified prescription drug coverage in the approved service area for a Part D-eligible beneficiary on a standardized basis. The costs represented in each bid should be those for which the Applicant would be responsible. These costs would not include payments made by the plan enrollee for deductible, coinsurance, co-payments, or payments for the difference between the plan’s allowance and an out-of-network pharmacy’s usual and customary charge. The bid requires the separate identification, calculation, and reporting of costs assumed to be reimbursed by CMS through reinsurance. CMS requires that the bid represent a uniform benefit package based upon a uniform level of premium and cost sharing among all beneficiaries enrolled in the plan. The benefit packages submitted must be cross walked appropriately from the formulary. Pursuant to 42 CFR §423.505(k)(4), the CEO, CFO, or an individual delegated designee with the authority to sign on behalf of one of these officers, and who reports directly to such officer, must certify (based on best knowledge, information and belief) that the information in the bid submission, and assumptions related to projected reinsurance and low-income cost sharing subsidies, is accurate, complete, and truthful, and fully conforms to the requirements in section 42 CFR §423.265 of the regulations. In addition, consistent with section 42 CFR §423.265(c)(3), the pricing component of the bid must also be certified by a qualified actuary.
As part of its review of Part D bids, CMS conducts an analysis to ensure that multiple plan offerings by a sponsor represent meaningful variations based on plan characteristics that will provide beneficiaries with substantially different options. In general, CMS expects that more than three bids from a sponsoring organization would not provide meaningful variation. CMS reviews multiple bids received from a Part D Applicant as a whole and applies a reasonableness test to determine examples of a strong likelihood of incompetence and/or ‘gaming’, including, but not limited to: a) multiple bid submissions that would fail a reasonableness test; b) multiple bid submissions based on different formulary drug lists; c) multiple bid submissions based on different levels of utilization management control; and d) multiple bid submissions that reflect a significant unexplained variation in costs between the plans, particularly between plans offered to the group versus the individual market.
CMS evaluates the bids based on four broad areas: 1) administrative costs, 2) aggregate costs, 3) benefit structure, and 4) plan management. CMS evaluates the administrative costs for reasonableness in comparison to other bidders. CMS also examines aggregate costs to determine whether the revenue requirements for qualified prescription drug coverage are reasonable and equitable. In addition, CMS reviews the steps the Part D sponsor is taking to control costs, such as through various programs that encourage use of generic drugs. Finally, CMS examines indicators concerning plan management, such as customer service.
CMS is also required to make certain that bids and plan designs meet statutory and regulatory requirements. We conduct actuarial analysis to determine whether the proposed benefit meets the standard of providing qualified prescription drug coverage. Also, CMS reviews the structure of the premiums, deductibles, co-payments, and coinsurance charged to beneficiaries and other features of the benefit plan design to ensure that it is not discriminatory (that is, that it does not substantially discourage enrollment by certain Part D eligible individuals).
CMS evaluates the reasonableness of bids submitted by Part D sponsors by means of an actuarial valuation analysis. This requires evaluating assumptions regarding the expected distribution of costs, including average utilization and cost by drug coverage tier. CMS may test these assumptions for reasonableness through actuarial analysis and comparison to industry standards and other comparable bids. Bid negotiation may take the form of negotiating changes upward or downward in the utilization and cost per script assumptions underlying the bid’s actuarial basis. We may exercise our authority to deny a bid if we do not believe that the bid and its underlying drug prices reflect market rates.
An integral component of this Solicitation concerns the pharmacy access standards established under section 1860D-4(b)(1)(C) of the Social Security Act. The standards require in part that each Part D sponsor must secure the participation in their pharmacy networks of a sufficient number of pharmacies to dispense drugs directly to patients (other than by mail order) to ensure convenient access to covered Part D drugs by Part D plan enrollees. To implement this requirement, specific retail pharmacy access rules consistent with the TRICARE standards were developed and are delineated in 42 CFR §423.120. Furthermore, Part D sponsors must provide adequate access to home infusion and convenient access to long-term care, and Indian Health Service, Indian Tribe and Tribal Organization, and Urban Indian Organization (I/T/U) pharmacies in accordance with 42 CFR § 423.120 and related CMS instructions and guidance.
Applicants must ensure that their retail pharmacy network meets the criteria established under 42 CFR §423.120. Applicants must ensure the pharmacy network has a sufficient number of pharmacies that dispense drugs directly to patients (other than by mail order) to ensure convenient access to Part D drugs. CMS rules require that Applicants establish retail pharmacy networks in which:
In urban areas, at least 90 percent of Medicare beneficiaries in the Applicant’s service area, on average, live within 2 miles of a retail pharmacy participating in the Applicant’s network;
In suburban areas, at least 90 percent of Medicare beneficiaries in the Applicant’s service area, on average, live within 5 miles of a retail pharmacy participating in the Applicant’s network; and
In rural areas, at least 70 percent of Medicare beneficiaries in the Applicant’s service area, on average, live within 15 miles of a retail pharmacy participating in the Applicant’s network.
Applicants may count I/T/U pharmacies and pharmacies operated by Federally Qualified Health Centers and Rural Health Centers towards the standards of convenient access to retail pharmacy networks.
Section 3.4.1 of this Solicitation includes a reference to the Appendix entitled Retail Pharmacy Network Access Instructions that provides Applicants with detailed instructions to complete the retail pharmacy network access portion of this submission. For purposes of meeting the 2011 Pharmacy Access requirements, Applicants may use their contracted PBM’s existing 2010 Part D network to demonstrate compliance. If an Applicant is creating a new Part D network, the submission must be based on executed contracts for Year 2011. CMS conducts the review of Retail Pharmacy Access based on the service area that the Applicant has provided in HPMS by February 25, 2010. To the extent that the service area is reduced during the application review process, the pharmacy access submission reports must pass a full and complete CMS review, including a review that ensures the access submission matches the service area in HPMS at one of the following points in time:
At the HPMS gate closing time of the An initial application submission (a fully passing retail access review at this point in the application process will not require a subsequent review even if the service area is later reduced), or
At the HPMS gate closing time of the courtesy submission window after CMS has issued an interim deficiency notice, if the initial application retail submission is found to contain retail access related deficiencies of any type (a fully passing retail access review at this point in the application process will not require a subsequent review even if the service area is later reduced), or
At the HPMS gate closing time of the final submission window after CMS has issued a Notice of Intent to Deny (see Section 2.4), if the courtesy retail submission is found to contain retail access related deficiencies of any type.
If none of the submissions includes a service area that perfectly matches the service area shown for that application/contract number in HPMS at that exact point in time, CMS will conclude that the Applicant is itself unclear about its service area intentions, will find the submission deficient, and will deny the application for (at a minimum) being unable to demonstrate that it meets the retail access requirements.
While Applicants are required to demonstrate that they meet the Part D pharmacy access requirements at the time this solicitation is submitted to CMS, CMS expects that pharmacy network contracting will be ongoing in order to maintain compliance with our retail pharmacy access requirements. See the Appendix entitled Retail Pharmacy Network Access Instructions for detailed instructions for the retail pharmacy network analysis.
Applicants must demonstrate that their contracted pharmacy network provides adequate access to home infusion pharmacies. In order to demonstrate adequate access to home infusion pharmacies, Applicants must provide a list of all contracted home infusion pharmacies (see section 3.4.4). CMS uses this pharmacy listing to compare Applicants’ home infusion pharmacy network against existing Part D sponsors in the same service area to ensure that Applicants have contracted with an adequate number of home infusion pharmacies. The adequate number of home infusion pharmacies is developed based on data provided by all Part D sponsors through the annual Part D Reporting Requirements. A reference file entitled “Adequate Access to Home Infusion Pharmacies” is provided on the CMS website.develop a ratio of Medicare beneficiaries to contracted home infusion pharmacies in each State/Territory in the proposed service area. The threshold of beneficiaries to home infusion pharmacy is calculated from the home infusion network pharmacy lists submitted annually by all existing PDP sponsors as part of the Part D Reporting Requirements.
Applicants must demonstrate that their contracted pharmacy network provides convenient access to long-term care pharmacies. In order to demonstrate convenient access to long-term care pharmacies, Applicants must provide a list of all contracted long-term care pharmacies (see section 3.4.5). CMS uses this pharmacy listing, as well as information reported as part of Applicants’ reporting requirements and complaints data, to evaluate initial and ongoing compliance with the convenient access standard.
Applicants must demonstrate that they have offered standard contracts to all I/T/U pharmacies residing within the Applicants’ service areas. In order to demonstrate convenient access to I/T/U pharmacies, Applicants must provide a list of all I/T/U pharmacies to which they have offered contracts (see section 3.4.6). CMS provides the current national list of all I/T/U pharmacies to assist Applicants in identifying the states in which I/T/U pharmacies reside at the www.cms.hhs.gov/PrescriptionDrugCovContra/ website.
Waivers for Plans in the Territories. To ensure access to coverage in the territories, §1860D-42(a) of the Social Security Act grants CMS the authority to waive the necessary requirements to secure access to qualified prescription drug coverage for Part D eligible individuals residing in the territories. The regulations at 42 CFR §423.859(c) allow CMS to waive or modify the requirement for access to coverage in the territories to be waived or modified either through an Applicant’s request or at CMS’ own determination. Under that authority, CMS will consider waiving the convenient access requirements for a plan’s Part D contracted retail pharmacy network, found in 42 CFR §423.120(a)(1) for the Territories, if an Applicant requests such a waiver, and demonstrates that it has made a good faith effort to meet the requirements described in Section 3.4.1F of this solicitation.
As a part of the application process, those organizations seeking to offer 800 series plans may submit individual waiver/modification requests to CMS. Applicants should submit an attachment via an upload in the HPMS Part D Attestations section that addresses the following:
Specific provisions of existing statutory, regulatory, and/or CMS policy requirement(s) the entity is requesting to be waived or modified (please identify the specific requirement (e.g., 42 CFR 423.32, Section 30.4 of the Part D Enrollment Manual) and whether you are requesting a waiver or a modification of these requirements);
How the particular requirement(s) hinder the design of, the offering of, or the enrollment in, the employer-sponsored group plan;
Detailed description of the waiver/modification requested including how the waiver/modification will remedy the impediment (i.e., hindrance) to the design of, the offering of, or the enrollment in, the employer-sponsored group prescription drug plan;
Other details specific to the particular waiver/modification that would assist CMS in the evaluation of the request; and
Contact information (contract number, name, position, phone, fax and email address) of the person who is available to answer inquiries about the waiver/modification request.
Successful Applicants will be deemed qualified to enter into a Part D contract with CMS to operate one or more Medicare prescription drug plans after CMS has reviewed the Applicant’s entire submission. Only after the qualified Applicant and CMS have reached agreement on the Applicant’s bid submissions will the Applicant be asked to execute its Part D contract. Approved Part D applications are valid for the forthcoming contract year. Should an applicant decide to not execute a contract after receiving application approval, then the organization will need to submit a new application if it chooses to enter the Part D market in a future contract year.
Applicants may seek to protect their information from disclosure under the Freedom of Information Act (FOIA) by claiming that FOIA Exemption 4 applies. The Applicant is required to label the information in question “confidential” or “proprietary”, and explain the applicability of the FOIA exemption it is claiming. This designation must be in writing. When there is a request for information that is designated by the Applicant as confidential or that could reasonably be considered exempt under Exemption 4, CMS is required by its FOIA regulation at 45 CFR §5.65(d) and by Executive Order 12,600 to give the submitter notice before the information is disclosed. To decide whether the Applicant’s information is protected by Exemption 4, CMS must determine whether the Applicant has shown that— (1) disclosure of the information might impair the government's ability to obtain necessary information in the future; (2) disclosure of the information would cause substantial harm to the competitive position of the submitter; (3) disclosure would impair other government interests, such as program effectiveness and compliance; or (4) disclosure would impair other private interests, such as an interest in controlling availability of intrinsically valuable records, which are sold in the market. Consistent with our approach under the Medicare Advantage program, we would not release information under the Medicare Part D program that would be considered proprietary in nature.
Note: Nothing in this application is intended to supersede the regulations at 42 CFR Part 423. Failure to reference a regulatory requirement in this application does not affect the applicability of such requirement, and PDP sponsors and/or Applicants are required to comply with all applicable requirements of the regulations in Part 423 of 42 CFR. In particular, the attestations in this application are intended to highlight examples of key requirements across a variety of functional and operational areas, but are in no way intended to reflect a complete or thorough description of all Part D requirements.
For most of the Part D program requirements described in this solicitation, CMS has issued operational policy guidance that provides more detailed instructions to Part D sponsors. Organizations submitting an application in response to this solicitation acknowledge that in making the attestations stated below, they are also representing to CMS that they have reviewed the associated guidance materials posted on the CMS web site and will comply with such guidance should they be approved for a Part D contract. Applicants must visit the CMS web site periodically to stay informed about new or revised guidance documents.
NOTE: All uploads and templates will be accessed in HPMS through the HPMS Contract Management Module. Applicants should refer to the Contract Management – Online Application User’s Guide Version 2.0 for further instructions.
SPECIAL INSTRUCTIONS FOR JOINT ENTERPRISE APPLICANTS: If an application is being submitted by a joint enterprise, as described above in Section 2.4, a separate set of responses to the requirements in Section 3.1 must be provided as part of this application by each member organization of the joint enterprise.
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
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B. Upload in HPMS a .pdf document that provides a brief summary of the history, structure and ownership of your organization (including the identification of the parent organization). Include a chart showing the structure of ownership, subsidiaries, and business affiliations. Additionally, include a chart showing the organizational structure of your organization that clearly depicts the placement of the Part D operations within your legal entity.
C. First tier, Downstream and Related entities Function Chart
In HPMS, on the Contract & Management/Part D Information/Part D Data Page, provide names of the first tier, downstream and related entities you will use to carry out each of the functions listed in this chart: (Indicate with “name of Applicant’s Organization” where applicant will perform those functions) |
Function |
First tier, Downstream and Related entities |
A pharmacy benefit program that performs adjudication and processing of pharmacy claims at the point of sale. |
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A pharmacy benefit program that performs negotiation with prescription drug manufacturers and others for rebates, discounts, or other price concessions on prescription drugs. |
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A pharmacy benefit program that performs administration and tracking of enrollees’ drug benefits in real time, including TrOOP balance processing. |
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A pharmacy benefit program that performs coordination with other drug benefit programs, including, for example, Medicaid, state pharmaceutical assistance programs, or other insurance. |
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A pharmacy benefit program that develops and maintains a pharmacy network. |
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A pharmacy benefit program that operates an enrollee grievance and appeals process |
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A pharmacy benefit program that performs customer service functionality, that includes serving seniors and persons with a disability. |
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A pharmacy benefit program that performs pharmacy technical assistance service functionality. |
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A pharmacy benefit program that maintains a pharmaceutical and therapeutic committee. |
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A pharmacy benefit program that performs enrollment processing. |
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D. In HPMS, upload copies of executed contracts, fully executed letters of agreement, administrative services agreements, or intercompany agreements (in .pdf format) with each first tier, downstream and related entities identified in Sections 3.1.1 C that:
Clearly identify the parties to the contract (or letter of agreement).
Describe the functions to be performed by the first tier, downstream or related entity. 42 CFR §423.505(i)(4)(i)
Describe the reporting requirements the first tier, downstream, or related entity has to the Applicant. 42 CFR §423.505(i)(4)(i)
Contain language clearly indicating that the first tier, downstream, or related entity has agreed to participate in your Medicare Prescription Drug Benefit program (except for a network pharmacy if the existing contract would allow participation in this program).
Contains flow-down clauses requiring their activities be consistent and comply with the Applicant’s contractual obligations as a Part D sponsor. 42 CFR §423.505(i)(3)(iii)
Describe the payment the first tier, downstream, or related entity will receive for performance under the contract, if applicable.
Clearly indicates that the contract is for a term of at least the initial one-year contract period (i.e., January 1 through December 31) for which this application is being submitted. Where the contract is for services or products to be used in preparation for the next contract year’s Part D operations (e.g., marketing, enrollment), the initial term of such contract must include this period of performance (e.g., contracts for enrollment-related services must have a term beginning no later than November 15 extending through the full contract year ending on December 31 of the next year).
Are signed by a representative of each party with legal authority to bind the entity.
Contain language obligating the first tier, downstream, or related entity to abide by all applicable Federal laws and regulations and CMS instructions. 42 CFR §423.505(i)(4)(iv)
Contain language obligating the first tier, downstream, or related entity to abide by State and Federal privacy and security requirements, including the confidentiality and security provisions stated in the regulations for this program at 42 CFR §423.136.
Contain language ensuring that the first tier, downstream, or related entity will make its books and other records available in accordance with 42 CFR §423.505(e)(2) and 42 CFR §423.505(i)(2). Generally stated these regulations give HHS, the Comptroller General, or their designees the right to audit, evaluate and inspect any books, contracts, records, including medical records and documentation involving transactions related to CMS’ contract with the Part D sponsor and that these rights continue for a period of 10 years from the final date of the contract period or the date of audit completion, whichever is later. 42 CFR §423.505(i)(2)
Contain language that the first tier, downstream, or related entity will ensure that beneficiaries are not held liable for fees that are the responsibility of the Part D sponsor. 42 CFR §423.505(i)(3)(i)
Contain language that the first tier, downstream, or related entity indicates clearly that any books, contracts, records, including medical records and documentation relating to the Part D program will be provided to either the sponsor to provide to CMS or its designees, or will be provided directly to CMS or its designees. 42 CFR §423.505(i)(3)(iv)
Contain language that if the Applicant, upon becoming a Part D sponsor, delegates an activity or responsibility to the first tier, downstream, or related entity, that such activity or responsibility may be revoked if CMS or the Part D sponsor determines the first tier, downstream, or related entity has not performed satisfactorily. Note: The contract/administrative services agreement may include remedies in lieu of revocation to address this requirement. 42 CFR§ 423.505(i)(4)(ii)
Contain language specifying that the Applicant, upon becoming a Part D sponsor, will monitor the performance of the first tier, downstream, or related entity on an ongoing basis. 42 CFR §423.505(i)(4)(iii)
If the first tier, downstream, or related entity will establish the pharmacy network or select pharmacies to be included in the network contain language that the Part D sponsor retains the right to approve, suspend, or terminate any arrangement with a pharmacy. 42 CFR §423.505(i)(5)
If the first tier, downstream, or related entity will establish the pharmacy network or select pharmacies to be included in the network contain language that payment to such pharmacies (excluding long-term care and mail order) shall be issued, mailed, or otherwise transmitted with respect to all clean claims submitted by or on behalf of pharmacies within 14 days for electronic claims and within 30 days for claims submitted otherwise. 42 CFR §423.505(i)(3)(vi) and 42 CFR §423.520
If the first tier, downstream, or related entity will establish the pharmacy network or select pharmacies to be included in the network contain language that if a prescription drug pricing standard is used for reimbursement, identify the source used by the Part D sponsor for the standard of reimbursement. 42 CFR §423.505(i)(3)(viii)(B)
If the first tier, downstream, or related entity will establish the pharmacy network or select pharmacies to be included in the network contain language that if a standard is used for reimbursement, a provision that updates to such a standard occur not less frequently than once every 7 days beginning with an initial update on January 1 of each year, to accurately reflect the market price of acquiring the drug. 42 CFR §423.505(b)(21) and (i)(3)(viii)(A)
If the first tier, downstream, or related entity will establish the pharmacy network or select pharmacies to be included in the network contain language requiring that long-term care pharmacies have not less than 30 days (but no more than 90 days) to submit claims to the Part D sponsor for reimbursement under the plan. 42 CFR §423.505(i)(3)(vii)
E. Upload in HPMS electronic lists of the contract/administrative service agreement/intercompany agreement citations demonstrating that the requirements of Section 3.1.D are included in each contract and administrative service agreement. Submit these data by downloading the appropriate spreadsheet found in HPMS that mimics the Appendix entitled, Crosswalk of Citations of Section 3.1.1D to location in contracts/administrative service agreements/intercompany agreements submitted as attachments to Section 3.1.1.
F. In HPMS, on the Contract Management/Part D Information/Part D Data Page identify the methodology used for the prescription drug pricing standard reimbursement of pharmacies and the commercial source used to obtain the prescription drug pricing standard reimbursement updates.
G. F. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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HG. Special Requirement for Joint Enterprise Applicants: If Applicant answered 3.1.1F1 (table above) as YES, then Joint Enterprise Applicants must upload (in .pdf format) a copy of the agreement executed by the State-licensed entities describing their rights and responsibilities to each other and to CMS in the operation of a Medicare Part D benefit plan. Such an agreement must address at least the following issues:
Termination of participation in the joint enterprise by one or more of the member organizations; and
Allocation of CMS payments among the member organizations.
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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A. Provide in HPMS the National Association of Insurance Commissioners (NAIC) number if currently licensed. _______
B. In HPMS, complete the table below:
Attest ‘yes’ or ‘no’ to the following licensure requirements. |
Yes |
No |
Does Not Apply |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ or ‘no’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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B. If Applicant answered Yes to 3.1.4A2 and/or 3.1.4A3, upload in HPMS as a .pdf document, all past or pending, if known, investigations, legal actions, or matters subject to arbitration brought by a government agency (state or federal including CMS) over the past three years relating to payments from government entities, for healthcare and/or prescription drug services involving the following:
Applicant (and Applicant’s parent firm if applicable).
PBM (and PBM’s parent firm if applicable).
Key management or executive staff.
Provide as part of the upload a brief explanation of each action, including the following:
Legal names of the parties.
Circumstances.
Status (pending or closed).
If closed, provide the details concerning resolution and any monetary payments.
Settlement agreements or corporate integrity agreements.
A. In HPMS, in the Contract Management/Contact Information/Contact Data page provide the name/title; mailing address; phone number; fax number; and email address for the following required Applicant contacts:
Note: The same individual should not be identified for each of these contacts. If a general phone number is given then CMS requires specific extensions for the individual identified. Under no circumstances should these numbers merely lead to a company’s general automated phone response system. Further, Applicants must provide specific email addresses for the individuals named.
Note: Contact definitions are provided in HPMS in the Contract Management/Contact Information/Contact Data/Documentation link entitled Contact Definitions.
Contact |
Name/Title |
Mailing Address |
Phone/Fax Numbers |
Email Address |
Corporate Mailing |
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CEO – Sr. Official for Contracting |
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Chief Financial Officer |
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Medicare Compliance Officer |
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Enrollment Contact |
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Medicare Coordinator |
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System Contact |
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Customer Service Operations Contact |
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General Contact |
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User Access Contact |
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Backup User Access Contact |
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Marketing Contact |
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Medical Director |
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Bid Primary Contact |
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Payment Contact |
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Part D Claims Submission Contact |
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Formulary Contact |
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Pharmacy Network Management Contact |
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Medication Therapy Management Contact |
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Patient Safety Contact |
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Part D Benefits Contact |
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Part D Quality Assurance Contact |
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Part D Application Contact |
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Pharmacy Director |
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HIPAA Security Officer |
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HIPAA Privacy Officer |
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Part D Price File Contact (Primary) |
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Part D Price File Contact (Back-up) |
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Part D Appeals |
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Government Relations Contact |
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Emergency Part D Contact |
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Pharmacy Technical Help Desk Contact |
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Processor Contact |
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CMS Casework Communication Contact |
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Part D Exceptions Contact |
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EOB Transfer Contact |
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Coordination of Benefits Contact |
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CEO – CMS Administrator Contact |
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Plan to Plan Reconciliation Contact |
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Bid Audit Contact |
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Plan Directory Contact for Public Website |
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CAP Report Contact for Public Website |
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Financial Reporting Contact |
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Best Available Evidence Contact |
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Automated TrOOP Balance Transfer Contact |
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Agent/Broker Compensation Data Contact |
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Complaint Tracking Module (CTM) Contact |
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Part D Reporting Requirement Contact |
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Contact for Fraud Investigations Contact |
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B. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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B. In HPMS, complete the table below:
If Applicant is intending for its Part D benefit to include the use of a formulary, then Applicant must also provide a P&T committee member list either directly or through its pharmacy benefit manager (PBM). Applicant must attest ‘yes’ or ‘no’ that it is using its PBM’s P&T committee, in order to be approved for a Part D contract. Attest ‘yes’ or ‘no’ by clicking the appropriate response in HPMS: |
Yes |
No |
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Note: While the P&T committee may be involved in providing recommendations regarding the placement of a particular Part D drug on a formulary cost-sharing tier, the ultimate decision maker on such formulary design issues is the Part D plan sponsor, and that decision weighs both clinical and non-clinical factors. |
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C. If Applicant is intending for its Part D benefit to include use of a formulary, then the members of the P&T committee must be provided either directly by the Applicant or by the Applicant’s PBM. The membership of the P&T committee must be comprised as described in items B, 10, 11 and 13 above. If Applicant is providing names of P&T committee directly, then provide the membership in HPMS’ Contract Management/Part D Data page. If the PBM operates under a confidentiality agreement (where the Applicant does not know the membership of the PBM’s P&T Committee) refer to the Appendix entitled Applicant Submission of P & T Committee Member List and Certification Statement for additional instructions:
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
Reducing adverse drug interactions. |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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B. Complete in HPMS, in the Contract Management/Contract Service Area/Service Area Data page, the service area information indicating the regions (including territories) you plan to serve. PDP and MA-PD region and Territory information may be found on the www.cms.hhs.gov/ website. Be sure to list both the region/territory name and associated number. Note: CMS bases its pharmacy network analyses on the service area your organization inputs into HPMS. Please make sure that the service area information you input into HPMS corresponds to the pharmacy lists and access reports that are provided under the Pharmacy Access section of the application.
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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will be included in the respective downstream pharmacy network contracts. |
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B. Upload in HPMS a contract template in .pdf format for each for the following types of pharmacies: Retail, Mail Order, Home Infusion, Long-Term Care and I/T/U. The mail order contract template is only necessary if the plan is offering mail order. The I/T/U template is only necessary if the Applicant’s service area includes states in which I/T/U pharmacies reside. If Applicant has contracted with a Pharmacy Benefit Managementr entity to provide a pharmacy network, those downstream contract templates must also be uploaded. If there are several different types of standard terms and conditions for the same type of pharmacy, please provide a contract template for all versions and label according to type of pharmacy. For example, if different terms for retail pharmacies apply depending upon geographic location, a separate template representing each variation must be provided. Each contract template type must contain the unsigned standard terms and conditions, including the provisions listed in the Appendices entitled
Crosswalk for Retail Pharmacy Contracts
Crosswalk for Mail Order Pharmacy Contracts
Crosswalk for Home Infusion Pharmacy Access Contracts
Crosswalk for Long-Term Care Pharmacy Access Contracts
Crosswalk for I/T/U Pharmacy Access Contracts.
C. Upload in HPMS crosswalks of the Pharmacy Access Contract Citations [for Retail, Mail Order (if offered), Home Infusion, Long-Term Care and I/T/U Pharmacy networks] demonstrating that all applicable requirements are included in such contracts. Submit this data by downloading the Microsoft Excel worksheets from HPMS that are located on the Pharmacy Upload page, complete the worksheets and upload the finished document back into HPMS for each of the Appendices entitled
Crosswalk for Retail Pharmacy Contracts
Crosswalk for Mail Order Pharmacy Contracts
Crosswalk for Home-Infusion Pharmacy Access Contracts
Crosswalk for Long-Term Care Pharmacy Access Contracts
Crosswalk for I/T/U Pharmacy Access Contracts.
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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B. Upload in HPMS the Pharmacy Network Access Reports as described in the Appendix entitled Retail Pharmacy Network Access Instructions.
C. Upload in HPMS the Retail Pharmacy List:
To submit retail pharmacy listings to CMS, Applicants must download the Microsoft Excel worksheet from HPMS that is located specifically on the Pharmacy Upload page, complete the worksheet and upload the finished document back into HPMS.
D. Submission of Supporting Discussion in Areas Failing to Meet Access Standards
CMS will consider supporting discussion provided by an Applicant in evaluating the applicant’s application to determine if Applicant is qualified to be a Part D Sponsor. While you have the opportunity to provide this discussion, CMS’ expectation is that your organization will meet the required access standards in all cases. Providing the discussion below does not mean CMS will allow you to fail the access standards, but in extreme or unusual circumstances, we may consider this information.
Provide as an upload in HPMS, in .pdf format, the following information to demonstrate that meeting the access standard within the service area is not practical or is impossible.
Indicate the geographic areas in which the applicant cannot demonstrate that it meets the retail pharmacy convenient access standards as defined in Appendix entitled Retail Pharmacy Network Access Instructions.
Explain why these standards cannot be met. Include in the discussion relevant information such as geographic barriers, pharmacy infrastructure barriers, and/or market barriers.
Describe how the pharmacies in the Applicant’s retail contracted network will provide access to all eligible Part D individuals enrolled in the Applicant’s plan(s) in each of the geographic areas defined in item 1 above.
E. In HPMS, indicate whether you are seeking a waiver of the convenient access standards for the territories in which your organization intends to offer the Part D benefit. If your organization is not intending to offer the Part D benefit in the territories check N/A within HPMS.
Request for a Waiver of Convenient Access Standards for the Territories Yes No N/A |
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Region 35 – American Samoa |
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Region 36 – Guam |
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Region 37 – Northern Mariana Islands |
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Region 38 – Puerto Rico |
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Region 39 – US Virgin Islands |
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F. Complete the following if you marked YES to requesting a waiver of convenient access standards for any of the territories in 3.4.1E. In HPMS, in .pdf format, provide the following information:
Explain why your organization cannot demonstrate compliance with the access standards or why these standards cannot be met.
Describe the Applicant’s efforts to identify and contract with all of the retail pharmacies in each of the applicable territories.
Describe how the pharmacies in the Applicant’s contracted network demonstrate convenient access to all eligible Part D individuals enrolled in the Applicant’s plan(s) in each of the territories listed above as not meeting the standards in §423.120(a)(1).
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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A. In HPMS, complete the table below:
Applicants may offer a mail order option in addition to their contracted Part D pharmacy network but mail order pharmacies do not count in meeting network adequacy standards. Indicate in HPMS ‘yes’ or ‘no’ whether such mail order pharmacy is offered. |
Yes |
No |
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B. Mail Order Pharmacy List
To submit mail order pharmacy listings to CMS, Applicants must download the Microsoft Excel worksheet from HPMS that is located on the Pharmacy Upload page, complete the worksheet and upload the finished document back into HPMS.
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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B. Home Infusion Pharmacy List
To submit home infusion pharmacy listings to CMS, Applicants must download the Microsoft Excel worksheet template from HPMS that is located on the Pharmacy Upload page, complete the worksheet and upload the finished document back into HPMS.
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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B. LTC Pharmacy List
To submit LTC pharmacy listings to CMS, Applicants must download the Microsoft Excel worksheet template from HPMS that is located on the Pharmacy Upload page, complete the worksheet and upload the finished document back into HPMS.
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS to be approved for a Part D contract: |
Yes |
No |
N/A |
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Not all Part D regions have I/T/U pharmacies. If the Applicant’s service area covers any region that includes I/T/U pharmacies, then the Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. If all of the Applicant’s service area does not include I/T/U pharmacies, then the Applicant may answer ‘no’ or n/a and still be approved for a Part D contract since these requirements do not apply. Attest ‘yes,’ ‘no’ or n/a to each of the following qualifications by clicking on the appropriate response in HPMS: |
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B. I/T/U Pharmacy List
In order to demonstrate that a Part D Applicant meets these requirements Applicants must submit a complete list of all I/T/U pharmacies to which it has offered contracts. CMS provides the current list of I/T/U pharmacies, including the official name, address, and provider number (when applicable). The Applicant’s list must be submitted using the Microsoft Excel template provided by CMS on the HPMS Pharmacy Upload page, and must include all I/T/U pharmacies residing in any and all states within its service area.
To submit I/T/U pharmacy listings to CMS, Applicants must first download the Microsoft Excel worksheet template from HPMS that is located on the Pharmacy Upload page, complete the worksheet and upload the finished document back into HPMS.
A. In HPMS, complete the table below.
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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Note: A grievance is any complaint or dispute, other than one that involves a coverage determination, expressing dissatisfaction with any aspect of a PDP sponsor’s operations, activities, or behavior, regardless of whether remedial action is requested. Examples of subjects of a grievance include, but are not limited to:
Timeliness, appropriateness, access to, and/or setting of services provided by the PDP sponsor
Concerns about waiting times, demeanor of pharmacy or customer service staff
A dispute concerning the timeliness of filling a prescription or the accuracy of filling the prescription.
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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These requirements also apply to exceptions requests by Medicare eligible children for off-formulary Part D pediatric drugs and doses that are medically appropriate. |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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• NOTE: For information regarding the TrOOP facilitator, Applicant may link to http://medifacd.ndchealth.com/home/medifacd_home.htm
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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Applicant may use voicemail provided the message:
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
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B. Provide as an upload via HPMS, in a .pdf format, a copy of your organization’s Medicare Part D Compliance Plan and/or compliance policies and procedures that you intend to use for this contract.
The Part D compliance plan must be in accordance with 42 CFR 423.504(b)(4)(vi). In addition, the Part D compliance plan must demonstrate that all 7 elements in the regulation and in Chapter 9 are being implemented and are specific to the issues and challenges presented by the Part D program. A general compliance plan applicable to healthcare operations is not acceptable.
Note: Please be advised that the Part D Applicant is ultimately responsible for the implementation and monitoring of the day-to-day operations of its Part D compliance program. Section 40.1 of Chapter 9 of the Prescription Drug Benefit Manual indicates that the compliance officer and compliance committee functions may not be delegated or subcontracted. This means that the Medicare Compliance Officer identified in HPMS contacts (see section entitled HPMS Part D Contacts 3.1.5) must be an employee of the Applicant. A compliance plan adopted and operated by a Part D Applicant’s first tier, downstream, and related entities is not sufficient to demonstrate that the Part D Applicant meets the compliance program requirement.
C. In HPMS, complete and upload the table below. Applicant must clearly identify where each requirement can be found in the uploaded documents.
Crosswalk for the Part D Compliance Plan |
Document Page Number |
Written policies, procedures, and standards of conduct addressing Part D issues and articulating your organization’s commitment to abide by all applicable Federal and State standards. |
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Designation of an employee as the compliance officer and compliance committee accountable to senior management. (Note: This requirement cannot be delegated to a first tier, downstream, or related entity). |
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Effective training and education between the compliance officer and organization employees, contractors, agents and directors. |
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Effective lines of communication between the compliance officer and organization employees, contractors, agents and directors and members of the compliance committee. |
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Enforcement of standards through disciplinary guidelines that are well-publicized in the organization. |
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Procedures for internal monitoring and auditing (including first tier, downstream, and related entities) of operations as they relate to Part D administration. |
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Procedures for ensuring prompt response to detected Part D offenses and development of corrective action initiatives, relating to the Applicant’s contract as a Part D sponsor. |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
Yes |
No |
Reporting Requirements Guidance |
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Business Transactions and Financial Requirements |
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Claims Data |
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Rebate Data |
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Other Data |
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Supporting www.medicare.gov |
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Conflict of Interest |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
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B. In HPMS, complete Appendix XI entitled Data Use Agreement.
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
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Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
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A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following qualifications to be approved for a Part D contract. Attest ‘yes’ or ‘no’ to each of the following qualifications by clicking on the appropriate response in HPMS: |
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1. Applicant agrees once its enrollment is more than 600 enrollees (as of July in the preceding contract year), it will contract with an approved CAHPS survey vendor and pay for the CAHPS data collection costs. |
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2. Applicant agrees to abide by forthcoming CMS guidance to the process for contracting with approved CAHPS survey vendors. |
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Upload in HPMS, in a .pdf format, the following certification:
I, , attest to the following:
(NAME & TITLE)
I have read the contents of the completed application and the information contained herein is true, correct, and complete. If I become aware that any information in this application is not true, correct, or complete, I agree to notify the Centers for Medicare & Medicaid Services (CMS) immediately and in writing.
I authorize CMS to verify the information contained herein. I agree to notify CMS in writing of any changes that may jeopardize my ability to meet the qualifications stated in this application prior to such change or within 30 days of the effective date of such change. I understand that such a change may result in termination of the approval.
I agree that if my organization meets the minimum qualifications and is Medicare-approved, and my organization enters into a Part D contract with CMS, I will abide by the requirements contained in Section 3.0 of this Application and provide the services outlined in my application.
I agree that CMS may inspect any and all information necessary including inspecting of the premises of the Applicant’s organization or plan to ensure compliance with stated Federal requirements including specific provisions for which I have attested. I further agree to immediately notify CMS if despite these attestations I become aware of circumstances which preclude full compliance by January 1 of the upcoming contract year with the requirements stated here in this application as well as in Part 423 of 42 CFR of the regulation.
I understand that in accordance with 18 U.S.C. §1001, any omission, misrepresentation or falsification of any information contained in this application or contained in any communication supplying information to CMS to complete or clarify this application may be punishable by criminal, civil, or other administrative actions including revocation of approval, fines, and/or imprisonment under Federal law.
I further certify that I am an authorized representative, officer, chief executive officer, or general partner of the business organization that is applying for qualification to enter into a Part D contract with CMS.
I acknowledge that I am aware that there is operational policy guidance, including the forthcoming Call Letter, relevant to this application that is posted on the CMS website and that it is continually updated. Organizations submitting an application in response to this solicitation acknowledge that they will comply with such guidance should they be approved for a Part D contract.
Authorized Representative Name (printed) Title
Authorized Representative Signature Date (MM/DD/YYYY)
DESIGNATION OF APPLICATION AS “800 SERIES” EGWP ONLY (NO INDIVIDUAL PLANS WILL BE OFFERED)
Checking the box below is optional. Only check the box below if you are applying to only offer “800 series” plans under this contract (no plans to individual beneficiaries will be offered). Do not check the box below if you intend to offer plans to individual beneficiaries and “800 series” plans under this contract number.
I am hereby designating this application as one which will only offer “800 series” plans. No plans will be offered to individual Medicare beneficiaries under this contract number.
{Entity MUST complete if it is applying to only offer “800 series” EGWPs (no plans will be offered to individual Medicare beneficiaries under this contract number).}
EGWP Attestation for Contract _________
1. EGWP Service Area & PHARMACY ACCESS Requirements
PDP Sponsor Applicants may provide coverage to employer group members wherever they reside (i.e., nationwide). However, in order to provide coverage to retirees wherever they reside, PDP Sponsor Applicants must set their service areas to include all areas where retirees may reside during the plan year (i.e., set national service areas).
New PDP Sponsors Offering Individual and “800 Series” Plans – Pharmacy Access:
PDP Sponsors offering both individual and “800 series” plans are not required to submit separate retail pharmacy access reports (see Appendix entitled “Retail Pharmacy Network Access Instructions”) or other pharmacy access submittals (mail order, home infusion, long-term care, I/T/U) for their “800 series” service areas in addition to those required to be submitted for their individual plan service areas. PDP Sponsors will not initially be required to have retail and other pharmacy networks in place for those designated EGWP service areas outside of their individual plan service areas. However, in accordance with employer group waiver pharmacy access policy, pharmacy access sufficient to meet the needs of enrollees must be in place once the PDP Sponsor enrolls members of an employer or union group residing in particular geographic locations outside of its individual plan service area.
New PDP Sponsors Only Offering “800 Series” Plans – Pharmacy Access:
PDP Sponsors only offering “800 series” plans (i.e., no plans will be offered to individual Medicare beneficiaries under this contract number) will be required to submit retail and other pharmacy access information (mail order, home infusion, long-term care, I/T/U) for the entire defined EGWP service area during the application process and demonstrate sufficient access in these areas in accordance with employer group waiver pharmacy access policy.
I certify that I am an authorized representative, officer, chief executive officer, or general partner of the business organization that is applying for qualification to offer employer/union-only group waiver plans in association with my organization’s Prescription Drug Plan Contract with CMS. I have read, understand, and agree to comply with the above statement about service areas and pharmacy access. If I need further information, I will contact one of the individuals listed in the instructions for this application.
{Entity MUST complete for a complete application.}
2. Certification
This appendix, along with the underlying 2011 Solicitation for Applications for New Prescription Drug Plans (PDP) Sponsors, comprises the entire “800 series” EGWP application for PDP Sponsor. All provisions of the 2011 Solicitation for Applications for New Prescription Drug Plans (PDP) Sponsors apply to all employer/union-only group waiver plan benefit packages offered by PDP Sponsor except where the provisions are specifically modified and/or superseded by particular employer/union-only group waiver guidance, including those waivers/modifications set forth below (specific sections of the 2011 Solicitation for Applications for New Prescription Drug Plans (PDP) Sponsor that have been waived or modified for new PDP Sponsor Applicants are noted in parentheses).
For existing PDP Sponsors, this appendixlication comprises the entire “800 series” EGWP application for PDP Sponsor. All provisions of the PDP Sponsor’s existing contract with CMS will apply to all employer/union-group waiver plan benefit packages offered by PDP Sponsor except where the provisions are specifically modified and/or superseded by particular employer/union-only group waiver guidance, including those waivers/modifications set forth below.
I, the undersigned, certify to the following:
1) Applicant is applying to offer new employer/union-only group waiver (“800 series”) prescription drug plans (PDPs) and agrees to be subject to and comply with all CMS employer/union-only group waiver guidance.
2) In order for new PDP Sponsors to be eligible for the CMS employer group waiver that allows PDP Sponsors to offer employer/union-only group waiver plan benefit packages without offering plans to individual beneficiaries, Applicant understands and agrees that it must complete the underlying 2011 Solicitation for Applications for New Prescription Drug Plans (PDP) Sponsors in addition to this appendix.
3) In order for new PDP Sponsors to be eligible for the CMS employer group waiver that allows PDP Sponsors to offer employer/union-only group waiver plan benefit packages without offering plans to individual beneficiaries, Applicant understands and agrees that it must be licensed in at least one state. (Section 3.1.3B)
4) Applicant understands and agrees that it is not required to submit a 2011 Part D bid (i.e., bid pricing tool) to offer its employer/union-only group waiver plans. (Section 3.2.6A1)
5) In order for new PDP Sponsors to be eligible for the CMS employer group waiver that allows PDP Sponsors to offer employer/union-only group waiver plan benefit packages without offering plans to individual beneficiaries, Applicant understands and agrees that as part of its completion of the 2011 Solicitation for Applications for New Prescription Drug Plan (PDP) Sponsors, it will submit retail pharmacy access reports (see Appendix entitled “Retail Pharmacy Network Access Instructions”) and other pharmacy access submissions (mail order, home infusion, long-term care, I/T/U) required at the time of application in Section 3.4 for its entire designated service area. (Section 3.4)
6) PDP Sponsor Applicants applying to offer employer/union-only group waiver plans and plans to individual beneficiaries understand and agree that it will not initially be required to have networks in place for those designated EGWP service areas outside of their individual plan service areas or submit retail pharmacy access reports (see Appendix entitled “Retail Pharmacy Network Access Instructions”) and other pharmacy access submissions (mail order, home infusion, long-term care, I/T/U) required in Section 3.4 for its designated EGWP service area. However, access sufficient to meet the needs of enrollees must be in place once an Applicant enrolls members of an employer or union group residing in particular geographic locations outside of its individual plan service area. (Section 3.4)
7) In order to be eligible for the CMS retail pharmacy access waiver of 42 CFR §423.120(a)(1), Applicant attests that its retail pharmacy network is sufficient (or will be sufficient prior to enrollment) to meet the needs of its enrollees throughout the employer/union-only group waiver PDP’s service area, including situations involving emergency access, as determined by CMS. Applicant acknowledges and understands that CMS may review the adequacy of the Applicant’s pharmacy networks and potentially require expanded access in the event of beneficiary complaints or for other reasons it determines in order to ensure that the Applicant’s network is sufficient to meet the needs of its employer group population. (Section 3.4.1A)
8) Applicant agrees to restrict enrollment in its employer/union-only group waiver PDPs to those Part D eligible individuals eligible for the employer’s/union’s employment-based retiree prescription drug coverage. (Section 3.5A3)
9) Applicant understands that its employer/union-only group waiver PDPs will not be included in the processes for auto-enrollment (for full-dual eligible beneficiaries) or facilitated enrollment (for other low income subsidy eligible beneficiaries). (Section 3.5A4)
10) Applicant understands that its employer/union-only group waiver plans will not be subject to the requirements contained in 42 CFR §423.48 to submit information to CMS, including the requirements to submit information (e.g., pricing and pharmacy network information) to be publicly reported on www.medicare.gov and the Medicare Prescription Drug Plan Finder. (Sections 3.7A and 3.16A17)
11) Applicant understands that dissemination materials for its employer/union-only group waiver PDPs are not subject to the requirements contained in 42 CFR §423.50 to be submitted for review and approval by CMS prior to use. However, Applicant agrees that it will submit these materials to CMS at the time of use in accordance with the procedures outlined in Chapter 12 of the Prescription Drug Benefit Manual. Applicant also understands CMS reserves the right to review these materials in the event of beneficiary complaints or for any other reason it determines to ensure the information accurately and adequately informs Medicare beneficiaries about their rights and obligations under the plan. (Section 3.13A1)
12) Applicant understands that its employer/union-only group waiver PDPs will not be subject to the requirements regarding the timing for issuance of certain dissemination materials, such as the Annual Notice of Change/ Evidence of Coverage (ANOC/EOC), Summary of Benefits (SB), Formulary, and LIS rider when an employer’s or union’s open enrollment period does not correspond to Medicare’s Annual Coordinated Election Period. For these employers and unions, the timing for issuance of the above dissemination materials should be appropriately based on the employer/union sponsor’s open enrollment period. For example, the Annual Notice of Change/Evidence of Coverage (ANOC/EOC), Summary of Benefits (SB), LIS rider, and Formulary are required to be received by beneficiaries no later than 15 days before the beginning of the employer/union group health plan’s open enrollment period. The timing for other dissemination materials that are based on the start of the Medicare plan (i.e., calendar) year should be appropriately based on the employer/union sponsor’s plan year. (Section 3.13A11)
13) Applicant understands that the dissemination requirements set forth in 42 CFR §423.128 will not apply to its employer/union-only group waiver PDPs when the employer/union sponsor is subject to alternative disclosure requirements (e.g., the Employee Retirement Income Security Act of 1974 (“ERISA”)) and complies with such alternative requirements. Applicant agrees to comply with the requirements for this waiver contained in employer/union-only group waiver guidance, including those requirements contained in Chapter 12 of the Prescription Drug Benefit Manual. (Sections 3.13A1-A2, A9)
14) Applicant understands that its employer/union-only group waiver plans will not be subject to the Part D beneficiary customer service call center hours and call center performance requirements. Applicant attests that it will ensure that a sufficient mechanism is available to respond to beneficiary inquiries and will provide customer service call center services to these members during normal business hours. However, CMS may review the adequacy of these call center hours and potentially require expanded beneficiary customer service call center hours in the event of beneficiary complaints or for other reasons in order to ensure that the entity’s customer service call center hours are sufficient to meet the needs of its enrollee population. (Section 3.13A6)
15) Applicant understands that CMS has waived the requirement that the employer/union-only group waiver plans must provide beneficiaries the option to pay their premium through Social Security withholding. Thus, the premium withhold option will not be available for enrollees in Applicant’s employer/union-only group waiver plans. (Sections 3.5A20 and 3.23A2-A4)
16) This Certification is deemed to incorporate any changes that are required by statute to be implemented during the term of the contract, and any regulations and policies implementing or interpreting such statutory provisions.
17) I have read the contents of the completed application and the information contained herein is true, correct, and complete. If I become aware that any information in this application is not true, correct, or complete, I agree to notify CMS immediately and in writing.
18) I authorize CMS to verify the information contained herein. I agree to notify CMS in writing of any changes that may jeopardize my ability to meet the qualifications stated in this application prior to such change or within 30 days of the effective date of such change. I understand that such a change may result in termination of the approval.
19) I understand that in accordance with 18 U.S.C. §1001, any omission, misrepresentation or falsification of any information contained in this application or contained in any communication supplying information to CMS to complete or clarify this application may be punishable by criminal, civil, or other administrative actions including revocation of approval, fines, and/or imprisonment under Federal law.
20) I acknowledge that I am aware that there is operational policy guidance, including the forthcoming Call Letter, relevant to this application that is posted on the CMS website and that it is continually updated. Organizations submitting an application in response to this solicitation acknowledge that they will comply with such guidance should they be approved to offer employer/union-only group waiver plans in association with the organization’s PDP Contract with CMS.
I certify that I am an authorized representative, officer, chief executive officer, or general partner of the business organization that is applying for qualification to offer employer/union-only group waiver plans (“800 series” EGWPs) in association with my organization’s PDP Contract with CMS. I have read and agree to comply with the above certifications.
{Entity MUST check box for a complete application.}
{Entity MUST create 800-series PBPs during plan creation and designate EGWP service areas.}
Direct Contract PDP Attestations For Contract _________
1. Service Area & PHARMACY ACCESS Requirements
In general, Part D plans can only cover beneficiaries in the service areas in which they are licensed and approved by CMS to offer benefits. CMS has waived this requirement for Direct Contract PDP Sponsors. Direct Contract PDP Sponsors can extend coverage to all of their retirees, regardless of whether they reside in one or more other PDP regions in the nation. In order to provide coverage to retirees wherever they reside, Direct Contract PDP Sponsors must set their service areas to include all areas where retirees may reside during the plan year (no mid-year service area expansions will be permitted). Applicants will be required to submit retail and other pharmacy access information (mail order, home infusion, long-term care, I/T/U) for the entire defined service area during the application process and demonstrate sufficient access in these areas in accordance with employer group waiver pharmacy access policy.
I certify that I am an authorized representative, officer, chief executive officer, or general partner of the business organization that is applying for qualification to offer employer/union-only Direct Contract PDP. I have read, understand, and agree to comply with the above statement about service areas and pharmacy access. If I need further information, I will contact one of the individuals listed in the instructions for this application.
{Entity MUST complete for a complete application.}
2. Certification
All provisions of the underlying 2011 Solicitation for Applications for New Prescription Drug Plans (PDP) Sponsors apply to all plan benefit packages offered by PDP Sponsor except where the provisions are specifically modified and/or superseded by particular employer/union-only group waiver guidance, including those waivers/modifications set forth below (specific sections of the underlying application that have been waived or modified for new PDP Sponsor Applicants are noted in parentheses).
I, the undersigned, certify to the following:
1) Applicant is applying to offer new employer/union Direct Contract prescription drug plans (PDPs) and agrees to be subject to and comply with all CMS employer/union-only group waiver guidance.
2) Applicant understands and agrees that it must complete and submit the underlying 2011 Solicitation for Applications for New Prescription Drug Plans (PDP) Sponsors in addition to this Appendix in its entirety. The 2011 Solicitation for Applications for New Prescription Drug Plans (PDP) Sponsors along with the Appendix entitled “Part D Financial Solvency & Capital Adequacy Documentation” and the Appendix entitled “Request For Additional Waiver/Modification of Requirements” (Optional) of the 2011 Solicitation for Applications for New Employer/Union Direct Contract Prescription Drug Plan (PDP) Sponsors and this attestation comprise a new Direct Contract PDP Sponsor Applicant’s entire application.
3) A Part D Sponsor must be organized and licensed under State law as a risk-bearing entity eligible to offer health insurance or health benefits coverage in each State in which it offers its coverage (42 CFR §423.504(b)(2)). However, CMS has waived the state licensing requirement for all Direct Contract PDP Sponsors along with the requirement to be a nongovernmental legal entity (42 CFR §423.4). As a condition of this waiver, Applicant understands that CMS will require such entities to meet the financial solvency and capital adequacy standards contained in the Appendix entitled “Part D Financial Solvency and Capital Adequacy Documentation” of this application. (Sections 3.1.1A1 and 3.1.3)
4) Applicant understands and agrees that it is not required to submit a 2011 Part D bid (i.e., bid pricing tool) to offer its Direct Contract PDP. (Section 3.2.6A1)
5) Applicant agrees to restrict enrollment in its Direct Contract PDP to those Part D eligible individuals eligible for the Direct Contract PDP’s employment-based retiree prescription drug coverage. Applicant agrees not to enroll active employees into its Direct Contract PDP. (Sections 3.5A3)
6) In order to be eligible for the CMS retail pharmacy access waiver of 42 CFR §423.120(a)(1), Applicant attests that its retail pharmacy network is sufficient to meet the needs of its enrollees throughout the Direct Contract PDP’s service area, including situations involving emergency access, as determined by CMS. Applicant acknowledges and understands that CMS may review the adequacy of the Applicant’s pharmacy networks and potentially require expanded access in the event of beneficiary complaints or for other reasons it determines in order to ensure that the Applicant’s network is sufficient to meet the needs of its employer group population. (Section 3.4.1A1)
7) Applicant understands and agrees that as part of its completion of the underlying 2011 Solicitation for Applications for New Prescription Drug Plans (PDP) Sponsors, it will submit retail pharmacy access reports (see Appendix entitled “Retail Pharmacy Network Access Instructions”) and other pharmacy access submissions (mail order, home infusion, long-term care, I/T/U) required at the time of application in Section 3.4 for its entire designated service area. (Section 3.4)
8) Applicant understands that its Direct Contract PDP will not be included in the processes for auto-enrollment (for full-dual eligible beneficiaries) or facilitated enrollment (for other low income subsidy eligible beneficiaries). (Sections 3.2.6A2 and 3.5A4)
9) Applicant understands that CMS has waived the requirement that the Direct Contract PDP must provide beneficiaries the option to pay their premium through Social Security withholding. Thus, the premium withhold option will not be available for enrollees in Applicant’s Direct Contract PDP. (Sections 3.5.A20 and 3.23A2-A4)
10) Applicant understands that dissemination materials for its Direct Contract PDP are not subject to the requirements contained in 42 CFR §423.50 to be submitted for review and approval by CMS prior to use. However, Applicant agrees that it will submit these materials to CMS at the time of use in accordance with the procedures outlined in Chapter 12 of the Prescription Drug Benefit Manual. Applicant also understands that CMS reserves the right to review these materials in the event of beneficiary complaints or for any other reason it determines to ensure the information accurately and adequately informs Medicare beneficiaries about their rights and obligations under the plan. (Section 3.13A1)
11) Applicant understands that its Direct Contract PDP will not be subject to the requirements regarding the timing for issuance of certain dissemination materials, such as the Annual Notice of Change/ Evidence of Coverage (ANOC/EOC), Summary of Benefits (SB), Formulary, and LIS rider when an employer’s or union’s open enrollment period does not correspond to Medicare’s Annual Coordinated Election Period. For these employers and unions, the timing for issuance of the above dissemination materials should be appropriately based on the employer/union sponsor’s open enrollment period. For example, the Annual Notice of Change/Evidence of Coverage (ANOC/EOC), Summary of Benefits (SB), LIS rider, and Formulary are required to be received by beneficiaries no later than 15 days before the beginning of the employer/union group health plan’s open enrollment period. The timing for other dissemination materials that are based on the start of the Medicare plan (i.e., calendar) year should be appropriately based on the employer/union sponsor’s plan year. (Section 3.13A11)
12) Applicant understands that the dissemination requirements set forth in 42 CFR §423.128 will not apply to its Direct Contract PDP when the employer/union sponsor is subject to alternative disclosure requirements (e.g., the Employee Retirement Income Security Act of 1974 (“ERISA”)) and complies with such alternative requirements. Applicant agrees to comply with the requirements for this waiver contained in employer/union-only group waiver guidance, including those requirements contained in Chapter 12 of the Prescription Drug Benefit Manual. (Sections 3.13A1-A2, A9)
13) Applicant understands that its Direct Contract PDP will not be subject to the requirements contained in 42 CFR §423.48 to submit information to CMS, including the requirements to submit information (e.g., pricing and pharmacy network information) to be publicly reported on www.medicare.gov and the Medicare Prescription Drug Plan Finder. (Sections 3.7A and 3.16A17)
14) Applicant understands that its Direct Contract PDP will not be subject to the Part D beneficiary customer service call center hours and call center performance requirements. Applicant attests that it will ensure that a sufficient mechanism is available to respond to beneficiary inquiries and will provide customer service call center services to these members during normal business hours. However, CMS may review the adequacy of these call center hours and potentially require expanded beneficiary customer service call center hours in the event of beneficiary complaints or for other reasons in order to ensure that the entity’s customer service call center hours are sufficient to meet the needs of its enrollee population. (Section 3.13A6)
15) Applicant understands that the management and operations requirements of 42 CFR §423.504(b)(4)(i)-(iii) are waived if the employer or union (or to the extent applicable, the business associate with which it contracts for prescription drug benefit services) is subject to ERISA fiduciary requirements or similar state or federal law standards. However, Applicant understands that it (or its business associates) are not relieved from the record retention standards applicable to other Part D Sponsors set forth in 42 CFR §423.505(d). (Section 3.20A1-A3)
16) In general, Part D plan Sponsors must report certain information to CMS, to their enrollees, and to the general public (such as the cost of their operations and financial statements) under 42 CFR §423.514(a). Applicant understands that in order to avoid imposing additional and possibly conflicting public disclosure obligations that would hinder the offering of employer sponsored group plans, CMS will modify these reporting requirements for Direct Contract PDPs to allow information to be reported to enrollees and to the general public to the extent required by other law (including ERISA or securities laws), or by contract. (Section 3.16.A15-A16)
17) This Certification is deemed to incorporate any changes that are required by statute to be implemented during the term of the contract, and any regulations and policies implementing or interpreting such statutory provisions.
18) I have read the contents of the completed application and the information contained herein is true, correct, and complete. If I become aware that any information in this application is not true, correct, or complete, I agree to notify CMS immediately and in writing.
19) I authorize CMS to verify the information contained herein. I agree to notify CMS in writing of any changes that may jeopardize my ability to meet the qualifications stated in this application prior to such change or within 30 days of the effective date of such change. I understand that such a change may result in termination of the approval.
20) I understand that in accordance with 18 U.S.C. §1001, any omission, misrepresentation or falsification of any information contained in this application or contained in any communication supplying information to CMS to complete or clarify this application may be punishable by criminal, civil, or other administrative actions including revocation of approval, fines, and/or imprisonment under Federal law.
21) I acknowledge that I am aware that there is operational policy guidance, including the forthcoming Call Letter, relevant to this application that is posted on the CMS website and that it is continually updated. Organizations submitting an application in response to this solicitation acknowledge that they will comply with such guidance should they be approved to offer employer/union-only group waiver plans in association with the organization’s PDP Contract with CMS.
I certify that I am an authorized representative, officer, chief executive officer, or general partner of the business organization that is applying for qualification to offer employer/union-only Direct Contract plans in association with my organization’s PDP Contract with CMS. I have read and agree to comply with the above certifications.
{Entity MUST check box for a complete application.}
(for Direct PDP Contract applicants only)
Background and Instructions:
A PDP Sponsor generally must be licensed by at least one state as a risk-bearing entity (42 CFR §423.401(a)(1)). CMS has waived the requirement for Direct Contract PDP Sponsors. Direct Contract PDP Sponsors are not required to be licensed, but must meet CMS Part D financial solvency and capital adequacy requirements. Each Direct Contract PDP Sponsor Applicant must demonstrate that it meets the requirements set forth in this Appendix and provide all required information set forth below. CMS may in its discretion approve, on a case-by-case basis, waivers of such requirements upon a demonstration from the Direct Contract PDP Sponsor Applicant that its fiscal soundness is commensurate with its financial risk and that through other means the entity can assure that claims for benefits paid for by CMS and beneficiaries will be covered. In all cases, CMS will require that the employer’s/union’s contracts and sub-contracts provide beneficiary hold harmless provisions.
The information required in this Appendix must be submitted electronically through HPMS as a supporting documentation upload to the Licensure and Solvency section of the Part D supporting file section in accordance with the instructions contained in this application.
I. EMPLOYER/UNION ORGANIZATIONAL INFORMATION
A. Complete the information in the table below.
IDENTIFY YOUR ORGANIZATION BY PROVIDING THE FOLLOWING INFORMATION: |
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Organization’s Full Legal Name:
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Full Address of Your Organization’s Headquarters (Street, City, State, Zip):
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Type of Entity (place a checkmark in all applicable boxes): Employer Fund established by one or more employers or labor organizations Union Government Church Group Publicly-Traded Corporation Privately- Held Corporation Other (list type) ____________ |
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Name of Your Organization’s Parent Organization, if any:
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Is Applicant subject to ERISA? Yes No |
Tax Status: For Profit Not-for-Profit |
State in Which your Organization is Incorporated or Otherwise Organized to do Business:
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B. Summary Description
Briefly describe the organization in terms of its history and its present operations. Cite significant aspects of its current financial, general management, and health services delivery activities. Please include the following:
The extent of the current Medicare population served by the Applicant, if any, and the maximum number of Medicare beneficiaries that could be served as a Direct Contract PDP.
The manner in which benefits are currently provided to the current Medicare population served by the Applicant, if any, the number of beneficiaries in each employer sponsored group option currently made available by the Applicant and how these options are currently funded (self-funded or fully insured).
The current benefit design for each of the options described in B above, including premium contributions made by the employer and/or the retiree, deductible, co-payments, or co-insurance, etc. (Applicant may attach a summary plan description of its benefits or other relevant materials describing these benefits.)
Information about other Medicare contracts held by the Applicant, (i.e., 1876, fee for service, PPO, etc.). Provide the names and contact information for all CMS personnel with whom Applicant works on their other Medicare contract(s).
The factors that are most important to Applicant in considering to apply to become a Direct Contract PDP for its retirees and how becoming a Direct Contract PDP will benefit the Applicant and its retirees.
C. If the Applicant is a state agency, labor organization, or a trust established by one or more employers or labor organizations, Applicant must provide the required information listed below:
State Agencies:
If Applicant is a state agency, instrumentality or subdivision, please provide the relationship between the entity that is named as the Direct Contract PDP Applicant and the state or commonwealth with respect to which the Direct Contract PDP Applicant is an agency, instrumentality or subdivision. Also, Applicant must provide the source of Applicant’s revenues, including whether applicant receives appropriations and/or has the authority to issue debt.
Labor Organizations:
If Applicant is a labor organization including a fund or trust, please provide the relationship (if any) between Applicant and any other related labor organizations such as regional, local or international unions, or welfare funds sponsored by such related labor organizations. If Applicant is a jointly trusteed Taft-Hartley fund, please include the names and titles of labor-appointed and management-appointed trustees.
Trusts:
If Applicant is a trust, such as a voluntary employee beneficiary association under Section 501(c)(9) of the Internal Revenue Code, please provide the names of the individual trustees and the bank, trust company or other financial institution that has custody of Applicant’s assets.
D. Policymaking Body (42 CFR §423.504(b)(4)(i)-(iii)
In general, an entity seeking to contract with CMS as a Direct Contract PDP Sponsor must have policymaking bodies exercising oversight and control to ensure actions are in the best interest of the organization and its enrollees, appropriate personnel and systems relating to medical services, administration and management, and an executive manager whose appointment and removal are under the control of the policymaking body.
An employer or union directly contracting with CMS as a Direct Contract PDP Sponsor may be subject to other, potentially different standards governing its management and operations, such as ERISA fiduciary requirements, state law standards, and certain oversight standards created under the Sarbanes-Oxley Act. In most cases, they will also contract with outside vendors (i.e., business associates) to provide health benefit plan services. To reflect these issues and avoid imposing additional (and potentially conflicting) government oversight that may hinder employers and unions from considering applying to offer Direct Contract PDPs, the management and operations requirements under 42 CFR §423.504(b)(4)(i)-(iii) are waived if the employer or union (or to the extent applicable, the business associate with which it contracts for health benefit plan services) is subject to ERISA fiduciary requirements or similar state or federal laws and standards. However, such entities (or their business associates) are not relieved from the record retention standards applicable to other PDP Sponsors. In accordance with the terms of this waiver, please provide the following information:
List the members of the organization's policymaking body (name, position, address, telephone number, occupation, term of office and term expiration date). Indicate whether any of the members are employees of the Applicant.
If the Applicant is a line of business versus a legal entity, does the Board of Directors of the corporation serve as the policymaking body of the organization? If not, describe the policymaking body and its relationship to the corporate Board.
Does the Federal Government or a State regulate the composition of the policymaking body? If yes, please identify all Federal and State regulations that govern your policymaking body (e.g., ERISA).
II. FINANCIAL DOCUMENTATION
A. Minimum Net Worth: $1.5 Million - Documentation of Minimum Net Worth
The Direct Contract PDP Applicant must demonstrate financial solvency through furnishing two years of independently audited financial statements to CMS. If the Direct Contract PDP Applicant has not been in operation at least twelve months, it may choose to: 1) obtain independently audited financial statements for a shorter time period; or 2) demonstrate that it has the minimum net worth through presentation of un-audited financial statements that contain sufficient detail to allow CMS to verify the validity of the financial presentation. The un-audited financial statement must be accompanied by an actuarial opinion from a qualified actuary regarding the assumptions and methods used in determining loss reserves, actuarial liabilities and related items.
A “qualified actuary” for purposes of this application means a member in good standing of the American Academy of Actuaries, a person recognized by the Academy as qualified for membership, or a person who has otherwise demonstrated competency in the field of actuarial science and is satisfactory to CMS.
If the Direct Contract PDP Applicant’s auditor is not one of the 10 largest national accounting firms in accordance with the list of the 100 largest public accounting firms published by the CCH Public Accounting Report, the Applicant should enclose proof of the auditor’s good standing from the relevant state board of accountancy.
B. Liquidity
The Direct Contract PDP Applicant must have sufficient cash flow to meet its financial obligations as they become due. The amount of the minimum net worth requirement to be met by cash or cash equivalents is $750,000. Cash equivalents are short-term highly liquid investments that can be readily converted to cash. To be classified as cash equivalents, investments must have a maturity date not longer than 3 months from the date of purchase.
In determining the ability of a Direct Contract PDP Applicant to meet this requirement, CMS will consider the following:
The timeliness of payment,
The extent to which the current ratio is maintained at 1:1 or greater, or whether there is a change in the current ratio over a period of time; and
The availability of outside financial resources.
CMS may apply the following corresponding corrective remedies:
If a PDP Sponsor fails to pay obligations as they become due, CMS will require the PDP Sponsor to initiate corrective action to pay all overdue obligations.
CMS may require the PDP Sponsor to initiate corrective action if any of the following are evident:
a) The current ratio declines significantly; or
b) A continued downward trend in the current ratio. The corrective action may include a change in the distribution of assets, a reduction of liabilities, or alternative arrangements to secure additional funding to restore the current ratio to at least 1:1.
If there is a change in the availability of outside resources, CMS will require the PDP Sponsor to obtain funding from alternative financial resources.
C. Methods of Accounting
A Direct Contract PDP Applicant generally must use the standards of Generally Accepted Accounting Principles (GAAP). Generally Accepted Accounting Principles (GAAP) are those accounting principles or practices prescribed or permitted by the Financial Accounting Standards Board. However, a Direct Contract PDP Sponsor whose audited financial statements are prepared using accounting principles or practices other than GAAP, such as a governmental entity that reports in accordance with the principles promulgated by the Governmental Accounting Standards Board (GASB), may utilize such alternative standard.
D. Bonding and Insurance
A Direct Contract PDP Applicant may request a waiver in writing of the bonding and/or insurance requirements set forth at 42 CFR §423.504(b)(4)(iv) and (v). Relevant considerations will include demonstration that either or both of the foregoing requirements are unnecessary based on the entity’s individualized circumstances, including maintenance of similar coverage pursuant to other law, such as the bonding requirement at ERISA Section 412.
E. Additional Information
A Direct Contract PDP Applicant must furnish the following financial information to CMS to the extent applicable:
Self-Insurance/Self Funding: If the Direct Contract PDP Applicant’s health plan(s) are self-insured or self-funded, it must forward proof of stop-loss coverage (if any) through copies of policy declarations.
Trust: If the Direct Contract PDP Applicant maintains one or more trusts with respect to its health plan(s), a copy of the trust documents, and if the trust is intended to meet the requirements of Section 501(c)(9) of the Internal Revenue Code, the most recent IRS approval letter.
Forms 5500 and M-1: The two most recent annual reports on Forms 5500 and M-1 (to the extent applicable) for the Direct Contract PDP Applicant’s health plans that cover prescription drugs for retirees that are Part D eligible individuals.
ERISA Section 411(a) Attestation: Each applicant (including an applicant that is exempt from ERISA) must provide a signed attestation that no person serves as a fiduciary, administrator, trustee, custodian, counsel, agent, employee, consultant, adviser or in any capacity that involves decision-making authority, custody, or control of the assets or property of any employee benefit plan sponsored by the Direct Contract PDP Applicant if he or she has been convicted of, or has been imprisoned as a result of his or her conviction of, one of the felonies set forth in ERISA Section 411(a), for 13 years after such conviction or imprisonment (whichever is later).
Defined Benefit Pension Plan: If the Direct Contract PDP Applicant sponsors one or more defined benefit pension plans (within the meaning of ERISA Section 3(35)) that is subject to the requirements of Title IV of ERISA, the latest actuarial report for each such plan.
Multi-Employer Pension Plan: If the Direct Contract PDP Applicant is a contributing employer with respect to one or more multi-employer pension plans within the meaning of ERISA Section 3(37), the latest estimate of contingent withdrawal liability.
Tax-Exempt Applicants Only: A copy of the most recent IRS tax-exemption.
III. INSOLVENCY REQUIREMENTS
A. Hold Harmless and Continuation of Coverage/Benefits
A Direct Contract PDP Applicant shall be subject to the same hold harmless and continuation of coverage/benefit requirements as Medicare Advantage contractors.
B. Insolvency Deposit
A Direct Contract PDP Applicant generally must forward confirmation of its establishment and maintenance of an insolvency deposit of at least $100,000, to be held in accordance with CMS requirements by a qualified U. S. Financial Institution. A “qualified financial institution” means an institution that:
Is organized or (in the case of a U.S. office of a foreign banking organization) licensed under the laws of the United States or any state thereof; and
Is regulated, supervised, and examined by the U.S. Federal or State authorities having regulatory authority over banks and trust companies.
A Direct Contract PDP Applicant may request a waiver in writing of this requirement.
IV. GUARANTEES (only applies to an Applicant that utilizes a Guarantor)
General Policy
A Direct Contract PDP Applicant, or the legal entity of which the Direct Contract PDP Applicant is a component, may apply to CMS to use the financial resources of a Guarantor for the purpose of meeting the requirements of a Direct Contract PDP Applicant set forth above. CMS has the sole discretion to approve or deny the use of a Guarantor.
Request to Use a Guarantor
To apply to use the financial resources of a Guarantor, a Direct Contract PDP Applicant must submit to CMS:
1. Documentation that the Guarantor meets the requirements for a Guarantor under paragraph (C) of this section; and
2. The Guarantor's independently audited financial statements for the current year-to-date and for the two most recent fiscal years. The financial statements must include the Guarantor's balance sheets, profit and loss statements, and cash flow statements.
Requirements for Guarantor
To serve as a Guarantor, an organization must meet the following requirements:
Is a legal entity authorized to conduct business within a State of the United States.
Not be under Federal or State bankruptcy or rehabilitation proceedings.
Have a net worth (not including other guarantees, intangibles and restricted reserves) equal to three times the amount of the PDP Sponsor guarantee.
If a State insurance commissioner or other State official with authority for risk-bearing entities regulates the Guarantor, it must meet the net worth requirement in Section II.A above with all guarantees and all investments in and loans to organizations covered by guarantees excluded from its assets.
If the Guarantor is not regulated by a State insurance commissioner or other similar State official, it must meet the net worth requirement in Section II.A above with all guarantees and all investments in and loans to organizations covered by a guarantee and to related parties (subsidiaries and affiliates) excluded from its assets.
Guarantee Document
If the guarantee request is approved, a Direct Contract PDP Applicant must submit to CMS a written guarantee document signed by an appropriate Guarantor. The guarantee document must:
State the financial obligation covered by the guarantee;
Agree to:
Unconditionally fulfill the financial obligation covered by the guarantee; and
Not subordinate the guarantee to any other claim on the resources of the Guarantor;
Declare that the Guarantor must act on a timely basis, in any case not more than 5 business days, to satisfy the financial obligation covered by the guarantee; and
Meet any other conditions as CMS may establish from time to time.
Ongoing Guarantee Reporting Requirements
A Direct Contract PDP Sponsor must submit to CMS the current internal financial statements and annual audited financial statements of the Guarantor according to the schedule, manner, and form that CMS requires.
Modification, Substitution, and Termination of a Guarantee
A Direct Contract PDP Sponsor cannot modify, substitute or terminate a guarantee unless the Direct Contract PDP Sponsor:
Requests CMS's approval at least 90 days before the proposed effective date of the modification, substitution, or termination;
Demonstrates to CMS's satisfaction that the modification, substitution, or termination will not result in insolvency of the Direct Contract PDP Applicant; and
Demonstrates how the Direct Contract PDP Applicant will meet the requirements of this section.
Nullification
If at any time the Guarantor or the guarantee ceases to meet the requirements of this section, CMS will notify the Direct Contract PDP Sponsor that it ceases to recognize the guarantee document. In the event of this nullification, a Direct Contract PDP Sponsor must:
Meet the applicable requirements of this section within 15 business days; and
If required by CMS, meet a portion of the applicable requirements in less than the 15 business days in paragraph (G.1.) of this section.
V. ONGOING REPORTING REQUIREMENTS
An approved Direct Contract PDP Applicant is required to update financial information set forth in Sections II and III above to CMS on an ongoing basis. The schedule, manner, and form of reporting will be in accordance with CMS requirements.
Only if applying to request a federal waiver of state licensure requirement for Prescription Drug Plan then download, complete and upload into HPMS the following form:
Application to Request Federal Waiver of State Licensure Requirement for Prescription Drug Plan (PDP)
A. Complete the table below. Contract# ________________
Identify the corporation seeking waiver of state licensure requirement for PDP plan |
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Full Legal Corporate Name: |
D.B.A: |
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Full Address of Corporation: (Street, City, State, Zip – No Post Office Boxes):
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Corporation Telephone Number: |
Corporation Fax Number: |
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Provide the corporation’s contact information for the person who will act as the main contact |
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Name of Individual: |
Title: |
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Address of Individual: (Street, City, State, Zip – No Post Office Boxes):
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Direct Telephone Number: |
Fax Number: |
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Email Address: |
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B. Request
I, on behalf of the legal entity identified in Section A, above, hereby request that the Secretary of the Department of Health and Human Services, pursuant to the authority granted under Section 1855(a) (2) and Section 1860D-12(c) of the Social Security Act, grant a waiver of the requirement that our organization be licensed under (Name of State or for Regional Plan Waiver, States) ________________ State laws as a risk-bearing entity eligible to sponsor prescription drug benefits coverage.
C. Certification
The undersigned officer has read this completed request for federal waiver form and does hereby declare that the facts, representations, and statements made in this form together with any attached information are true and complete to the best of my knowledge, information, and belief. The information herein declared by me represents matters about which I am competent, qualified, and authorized to represent the corporation. If any events, including the passage of time, should occur that materially change any of the answers to this request for federal waiver, the corporation agrees to notify the Centers for Medicare & Medicaid services immediately.
Corporate Name: __________________________ Date: _______________________________
By: ______________________________________
Print Name: _______________________________
Title: _____________________________________
Witness/Attest: ____________________________
D. Instructions for completing the cover sheet of licensure waiver application
Section A Contract #____________
Enter the corporate name
Enter the name under which your PDP will do business (D.B.A)
Enter the street address, telephone number and facsimile number of the Corporation at its corporate headquarters
Enter the name, title, telephone number, fax number, and email address of the main contact person
Section B
Indicate the State for which you are requesting a waiver or the States for which you are requesting a Regional Plan Waiver
Section C
Have a duly appointed corporate officer sign and date this form in the presence of a witness
If you have any questions regarding this form please contact:
Joseph Millstone
410-786-2976
Instructions Follow
(THIS SECTION FOR OFFICIAL USE ONLY)
Supporting Documentation for Request of Federal Waiver of State Licensure Requirement for Prescription Drug Plan (PDP) Sponsors
Complete Sections II and IV
I. Background and Purpose
This waiver request form is for use by Applicants who wish to enter into a contract with the Centers for Medicare and Medicaid Services (CMS) to become Prescription Drug Plan (PDP) sponsors and provide prescription drug plan benefits to eligible Medicare beneficiaries without a State risk-bearing entity license.
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) generally requires Applicants who wish to become PDP sponsors to be licensed under State law as a risk-bearing entity eligible to offer health insurance or health benefits coverage in each State in which the Applicant wishes to offer a PDP. However, the MMA created several exceptions to this State licensure requirement.
In general, there are 2 types of waivers – both of which are more fully explained in Section II below. The waivers are: (1) Single State waivers. For these waivers, the Applicant should submit a separate waiver request for each State, and the waiver is effective only with respect to the single State. (2) Regional plan waivers. These waivers may be obtained if an Applicant is licensed in one State in a region and wishes to receive a waiver for all the other States in the region in which it is not licensed. In this case, the entity need only submit one waiver request – not one for each and every State in which it is not licensed.
Waiver requests should be submitted to CMS using the criteria described below.
Approval of a waiver request, in no way suggests that the Applicant is approved for a Medicare contract with CMS. In addition to approval of a waiver request, the Applicant will be required to submit a Medicare contract application that demonstrates that the Applicant can meet the Federal definition of a PDP sponsor and that the prescription drug plan being offered will meet all plan requirements for PDPs.
Waiver Applicants must also comply with CMS standards for financial solvency and capital adequacy.
II. Waiver Eligibility
The following constitute the waivers available to Applicants. These are the sole grounds for receiving waivers.
A. Single State Waiver
The Applicant is requesting a single state waiver for the following state: _________. Please indicate in your response to section IV. (Information to be included in this request) the grounds upon which you are requesting a waiver (cover all applicable areas).
The State has failed to complete action on a licensing application within 90 days of the date of the State’s receipt of a substantially complete application. 42 CFR §423. 410(b) (1).
The State does not have a licensing process in effect with respect to PDP sponsors. 42 CFR §423.410(c).
The State has denied the license application on the basis of one of the following: (a) material requirements, procedures, or standards (other than solvency requirements) not generally applied by the State to other entities engaged in a substantially similar business; or (b) the State requires, as a condition of licensure, the Applicant to offer any product or plan other than a PDP. 42 CFR §423.410(b)(2).
The State has denied the licensure application, in whole or in part, for one of the following reasons: (a) on the basis of the Applicant’s failure to meet solvency requirements that are different from the solvency standards developed by CMS; or (b) the State has imposed, as a condition of licensing, any documentation or information requirements relating to solvency that are different from the information or documentation requirements in the solvency standards developed by CMS. 42 CFR §423.410(b)(3).
The State has denied the licensure application on the basis of grounds other than those required under Federal law. 42 CFR §423.410(b)(4).
NOTE: To meet the conditions for CMS to grant a state licensure waiver pursuant to 42 CFR §423.410(b), the waiver applicant must demonstrate that by the time the waiver application is submitted to CMS, either:
The State failed to complete action on the licensing application within 90 days of the date that the state received a substantially complete application. States must confirm the receipt and completeness of the application, which is necessary to establish that the 90-day period has been met; or
The State denied the substantially complete license application for one of the reasons specified in 42 CFR §423.410 (b)(2) through (b)(4), relating to Single-State Waivers.
In order to apply for a CMS waiver based on the ground that a State did not act within 90 days of receiving a substantially complete application, the State must have had a substantially complete application for at least 90 days at the time the waiver applicant applies to CMS for a waiver. Therefore, in order to use this ground as a basis for a waiver, any new State license application must have been received by a State(s) no later than November 1, 2009. This will insure that the State had time to confirm “the receipt and completeness of the application” which is necessary to establish that the 90-day period has been met. A state’s denial of an application that was not complete does not create grounds for waiver approval.
B. Regional Plan Waivers
The Applicant is State-licensed in the State(s) of __________________ and is applying for a regional plan waiver in the following region(s): __________________________ as provided under 42 CFR §423.415(a). The Applicant must demonstrate that it submitted a substantially complete licensure application in each State in the region for which it does not already have State licensure, except that no such application is necessary if CMS determines that the State does not have a licensing process for potential PDP sponsors.
III. Waiver Duration
A. Single State Waiver
The Single State waiver listed in II.A is effective for up to 36 months only and cannot be renewed unless CMS determines that the State in question does not have a licensing process in effect with respect to PDP sponsors. Thus, prior to the CMS renewal notice deadline for the fourth year the PDP sponsor must be State-licensed if it wishes to continue as a PDP sponsor and receive a contract for the subsequent year, unless CMS determines that the State in question has chosen not to create a licensing process for PDP sponsors – in which case the waiver can continue until CMS determines that a licensure process has been created. Single State waivers automatically terminate if the PDP sponsor obtains State licensure.
B. Regional Plan Waivers
The Regional Plan waivers expire at the end of the time period the Secretary determines is appropriate for timely processing of the licensure application, but in no case will a waiver extend beyond the end of the calendar year.
C. All Waivers
For both Single State and Regional Plan waivers, the waiver will terminate if the contract with Medicare terminates.
IV. Information to be Included in this Request
While the applicant should provide information concerning each of the following areas, the specific information and documentation requested below are not necessarily all inclusive for CMS to approve or deny the request. Applicants should provide any information and all documentation necessary to substantiate their request.
Single-State Waiver:
a) Specify the grounds from section II.A above, upon which you are requesting a waiver. Provide a narrative of the circumstances leading to the PDP’s eligibility for a waiver based on one of the grounds listed above. Include information about the state risk-bearing entity license for which the PDP applied, the application process that the PDP followed, and any relevant interaction with the state.
b) Provide documentation to substantiate the narrative required in (a). Depending on the grounds for waiver eligibility, this documentation should include but is not necessarily limited to the list below:
1. Evidence of state’s failure to act on a licensure application on a timely basis
Copy of the dated cover sheet to the application submitted to the state, state confirmation of the receipt and completeness of the application, state requests for additional information, and all pertinent correspondence with the state relating to the status of the application, etc.
2. Evidence of denial of the application based on discriminatory treatment
Documentation in b.1 above, and,
Copy of denial letter from the state, copy of “discriminatory” material requirements (including, state laws and regulation), procedures or standards to which the PDP was required to comply that are not generally applicable to other entities engaged in a substantially similar business, a copy of state licensure requirements that the PDP offer a particular product or plan in addition to a Medicare plan, and any supplemental material received from the state explaining itstheir rationale for the denial, etc.
PDPs seeking a waiver on the grounds that they are subject to requirements, procedures and standards not applicable to entities engaged in a “substantially similar business” must demonstrate through submission of these and other appropriate materials:
i) The types of entities subject to the different requirements, procedures and standards are engaged in a “substantially similar business”.
ii) The state requirements, procedures and standards imposed on the PDP entity are not applicable to other “substantially similar business” entities.
3. Evidence of denial of the application based on solvency requirements
Documentation in b.1 above, and,
Copy of denial letter from the state, copy of state solvency requirements, demonstration of the difference between state solvency requirements, procedures and standards and Federal PDP solvency requirements, procedures and standards, any other state information regarding documentation, information, and other material requirements, procedures or standards relating to solvency, or any correspondence detailing the reason the application was denied, etc.
4. Evidence of State denial of the application based on licensure standards other than those required by Federal law
Documentation in b.1 above, and,
Copy of denial letter from the state, memo identifying the state licensure standards by reference to relevant state law, regulation, or policy guidance and describing the how those standards differ from those required by Federal law.
c) Provide the name, address and telephone number of all state regulatory officials involved in the state application and/or denial proceedings.
d) Provide any other information that you believe supports your request for a waiver.
Regional Plan Waivers
a) Evidence of licensure in one state within the region and
b) Copy of the dated cover sheet to the application(s) submitted to the unlicensed state(s), state confirmation of the receipt and completeness of each application, state requests for additional information, and all pertinent correspondence with the state(s) relating to the status of the application, etc. – unless CMS determines that there is no PDP licensing process in effect in a state.
c) Provide the name, address and telephone number of all state regulatory officials involved in the state application and/or denial proceedings.
d) Provide any other information that you believe supports your request for a waiver.
V. Overview of Waiver Request Process
For single-state waivers, section 1860D-12(c) and section 1855(a)(2) of the Act require the Secretary to grant or deny this waiver request within 60 days after the date the Secretary determines that a substantially complete application has been filed. Upon receipt of a waiver request, CMS will review it to determine whether it contains sufficient information to approve or deny the request. The 60-day review period begins at the time CMS determines that the application is substantially complete.
Upload all appropriate documentation in pdf format into HPMS on the Part D Financial Solvency Upload Page.
I. DOCUMENTATION
A. Net Worth - Minimum Net Worth: $1.5 million
1. Documentation of Minimum Net Worth
At the time of application, the potential PDP Sponsor not licensed in any state must show evidence of the required minimum net worth. The PDP Sponsor must demonstrate this through an independently audited financial statement if it has been in operation at least twelve months.
If the organization has not been in operation at least twelve months it may choose to 1) obtain an independently audited financial statement for a shorter time period; or 2) demonstrate that it has the minimum net worth through presentation of an unaudited financial statement that contains sufficient detail that CMS may verify the validity of the financial presentation. The unaudited financial statement must be accompanied by an actuarial opinion by a qualified actuary regarding the assumptions and methods used in determining loss reserves, actuarial liabilities and related items.
A qualified actuary for the purposes of this application means a member in good standing of the American Academy of Actuaries or a person recognized by the Academy as qualified for membership, or a person who has otherwise demonstrated competency in the field of actuarial determination and is satisfactory to CMS.
B. Financial Plan
1. Plan Content and Coverage
At the time of application, the PDP Sponsor must upload in HPMS on the Part D Financial Solvency Upload page a business plan (with supporting financial projections and assumptions, satisfactory to CMS), covering the first twelve months of operation under the Medicare contract and meeting the requirements stated below. If the plan projects losses, the business plan must cover the period for twelve months past the date of projected break-even.
The business plan must include a financial plan with:
a. A detailed marketing plan;
b. Statements of revenue and expense on an accrual basis;
c. A cash flow statement;
d. Balance sheets;
e. The assumptions in support of the financial plan;
f. If applicable, availability of financial resources to meet projected losses; (if no projected losses this does not preclude applicant from calculating projected losses as prescribed by CMS in 2. b. below)and
g. Independent actuarial certification of business plan assumptions and plan feasibility by a qualified actuary.
2. Funding for Projected Losses
(a) Allowable sources of funding:
In the financial plan, the PDP Sponsor must demonstrate that it has the resources available to meet the projected losses for the time-period to breakeven. Except for the use of guarantees as provided in section (a) below, letters of credit as provided in section (b) below, and other means as provided in section (c) below, the resources must be assets on the balance sheet of the PDP Sponsor in a form that is either cash or is convertible to cash in a timely manner (i.e. cash or cash equivalents), pursuant to the financial plan.
(i) Guarantees will be acceptable as a resource to meet projected losses under the conditions detailed in Section III, Guarantees.
(ii) An irrevocable, clean, unconditional, evergreen letter of credit may be used in place of cash or cash equivalents if prior approval is obtained from CMS. It must be issued or confirmed by a qualified United States financial institution as defined in Section II.B, Insolvency, below. The letter of credit shall contain an issue date and expiration date and shall stipulate that the beneficiary need only draw a sight draft under the letter of credit and present it to obtain funds and that no other document need be presented.
“Beneficiary” means the PDP sponsor for whose benefit the credit has been established and any successor of the PDP sponsor by operation of law. If a court of law appoints a successor in interest to the named beneficiary, then the named beneficiary includes the court appointed bankruptcy trustee or receiver.
The letter of credit also shall indicate that it is not subject to any condition or qualifications any other agreement, documents or entities.
CMS must be notified in writing thirty days prior to the expiration without renewal or the reduction of a proposed or existing letter of credit or replacement of a letter of credit by one for a reduced amount.
Prior written approval of CMS should be secured by the PDP sponsor of any form of proposed letter of credit arrangements before it is concluded for purposes of funding for projected losses.
(iii) If approved by CMS, based on appropriate standards promulgated by CMS, a PDP sponsor may use the following to fund projected fund losses for periods after the first year: lines of credit from regulated financial institutions, legally binding agreements for capital contributions, or other legally binding contracts of a similar level of reliability.
NOTE: A plan needs to maintain its $1.5 million in net worth to meet the net worth standard (Section A, above) and may not use any portion of the $1.5 million in net worth to fund the projected losses. Net worth in excess of $1.5 million, which is funded through the forms allowable for meeting projected losses (i.e., cash, or cash equivalents,) may be counted in the projected losses funding however the minimum $750,000 liquidity requirement (Section C, below) must still be met and may not be used to meet the projected losses.
(b) Calculation of projected losses:
An applicant that has had state licensure waived must demonstrate that in order to cover projected losses, the applicant possesses allowable sources of funding sufficient to cover the greater of:
(i) 7.5 percent of the aggregated projected target amount for a given year (aggregated projected target amount is calculated by estimating the average monthly per capita cost of benefits (excluding administrative costs) and multiplying that amount by member months for a 12 month period), or
(ii) Resources to cover 100% of any projected losses, if the business plan projects losses greater than 7.5% of the aggregated projected target amount.
The applicant must upload in HPMS with the application, a worksheet calculating the aggregated projected target amount as defined above.
Enrollment projections, once submitted to CMS as part of the Applicant’s originally submitted financial solvency documentation, may be revised only when accompanied by supporting documentation providing an explanation for the revision along with a revised financial plan. CMS will not accept revisions made solely to ensure that the calculation of required funding for projected losses results in an amount less than or equal to the Applicant’s available financial resources. Additionally, the Applicant must upload in HPMS an attestation signed by the CEO, CFO, or an individual designated to sign on his or her behalf and who reports directly to the officer, describing the basis for the changes in enrollment projections (e.g., updated Medicare Part D market analysis information).
C. Liquidity
The PDP Sponsor must have sufficient cash flow to meet its financial obligations as they become due. The amount of minimum net worth requirement to be met by cash or cash equivalents is $750,000. Cash equivalents are short term highly liquid investments that can be readily converted to cash. To be classified as cash equivalents these investments must have a maturity date not longer than 3 months from the date of purchase
In determining the ability of a PDP Sponsor to meet this requirement, CMS will consider the following:
(a) The timeliness of payment,
(b) The extent to which the current ratio is maintained at 1:1 or greater, or whether there is a change in the current ratio over a period of time, and
(c) The availability of outside financial resources.
CMS may apply the following corresponding corrective action remedies:
(a) If the PDP Sponsor fails to pay obligations as they become due, CMS will require the PDP Sponsor to initiate corrective action to pay all overdue obligations.
(b) CMS may require the PDP Sponsor to initiate corrective action if any of the following are evident:
(1) The current ratio declines significantly; or
(2) A continued downward trend in the current ratio. The corrective action may include a change in the distribution of assets, a reduction of liabilities or alternative arrangements to secure additional funding to restore the current ratio to at least 1:1.
(c) If there is a change in the availability of the outside resources, CMS will require the PDP Sponsor to obtain funding from alternative financial resources.
D. Methods of Accounting
The PDP Sponsor may use the standards of Generally Accepted Accounting Principles (GAAP) or it may use the standards of Statutory Accounting Principles (SAP) applicable to the type of organization it would have been licensed as at the state level if a waiver were not granted by CMS. Whether GAAP or SAP is utilized however, there are certain additional differences cited below for waivered PDP Sponsors.
Generally Accepted Accounting Principles (GAAP) are those accounting principles or practices prescribed or permitted by the Financial Accounting Standards Board.
Statutory Accounting Principles are those accounting principles or practices prescribed or permitted by the domiciliary State insurance department in the State in whichthat the PDP Sponsor operates.
Waivered organizations should note that the maximum period of waiver is limited by Federal regulation. At such time as the waiver expires, the PDP Sponsor would have to obtain a risk bearing license.
Waivered PDP Sponsors should adjust their balance sheets as follows:
1. Calculation-Assets
The following asset classes will not be admitted as assets:
• Good will;
• Acquisition costs;
• Other similar intangible assets.
2. Calculation- Liabilities
Net worth means the excess of total admitted assets over total liabilities, but the liabilities shall not include fully subordinated debt.
Subordinated debt means an obligation that is owed by an organization, that the creditor of the obligation, by law, agreement, or otherwise, has a lower repayment rank in the hierarchy of creditors than another creditor. The creditor would be entitled to repayment only after all higher ranking creditor’s claims have been satisfied. A debt is fully subordinated if it has a lower repayment rank than all other classes of creditors and is payable out of net worth in excess of that required under Section IA, Net Worth and under Section IC, Liquidity above.
In order to be considered fully subordinated debt for the purpose of calculating net worth, the subordinated debt obligation must be a written instrument and include:
a) The effective date, amount, interest and parties involved.
b) The principal sum and/or any interest accrued thereon that are subject to and subordinate to all other liabilities of the PDP sponsor, and upon dissolution or liquidation, no payment of any kind shall be made until all other liabilities of the PDP sponsor have been paid.
c) The instrument states that the parties agree that the PDP sponsor must obtain written approval from CMS prior to the payment of interest or repayment of principal.
E. Financial Indicators and Reporting
The PDP Sponsor must upload a Health Blank Form (in the same format as utilized by the National Association of Insurance Commissioners) to CMS. The portion of the Health Blank Form submitted to CMS will be limited to the following pages:
• Jurat Page;
• Assets;
• Liabilities, Capital and Surplus;
• Statement of Revenue and Expenses;
• Capital and Surplus Account;
• Cash Flow;
• Actuarial Opinion (the actuarial opinion is required only of annual report filings). In addition, the PDP Sponsor shall submit an annual independently audited financial statement with management letter.
Note: Future frequency of reporting will be both quarterly (first, second, and third quarters only) and annually to CMS. CMS may choose to initiate monthly reporting from certain PDP Sponsors who because of their financial status CMS deems may require additional monitoring.
Reporting shall be on the following schedule:
Quarterly reporting PDP sponsors shall report within 45 days of the close of a calendar quarter ending on the last day of March, June and September. No separate quarterly report shall be required for the final quarter of the year.
Annually reporting and quarterly reporting PDP sponsors shall report annually within 120 days of the close of the calendar year i.e. by April 30th or within 10 days of the receipt of the annual audited financial statement, whichever is earlier.
Financial reporting may be the under the principles of General Accepted Accounting Principles (GAAP) or under Statutory Accounting Principles (SAP) applicable to similar organizations of similar type within the state where the organization is based. However, if an organization chooses to report under GAAP, it may not report under GAAP for a period longer than 36 months unless a state has chosen to not license such organizations.
II. INSOLVENCY
A. Hold Harmless and Continuation of Coverage/Benefits
PDP Sponsors shall be subject to the same hold harmless and continuation of coverage/benefit requirements as Medicare Advantage contractors.
B. Insolvency Deposit $100,000 held in accordance with CMS requirements by a qualified U. S. Financial Institution. A qualified financial institution means an institution that:
1. Is organized or (in the case of a U. S. office of a foreign banking organization) licensed, under the laws of the United States or any state thereof; and
2. Is regulated, supervised and examined by U. S. Federal or State authorities having regulatory authority over banks and trust companies.
III. GUARANTEES
A. General policy.
A PDP Sponsor, or the legal entity of which the PDP Sponsor is a Component, may apply to CMS to use the financial resources of a Guarantor for the purpose of meeting the requirements of a PDP Sponsor. CMS has the discretion to approve or deny approval of the use of a Guarantor.
B. Request to use a Guarantor.
To apply to use the financial resources of a Guarantor, a PDP Sponsor must upload in HPMS:
1. Documentation that the Guarantor meets the requirements for a Guarantor under paragraph (C) of this section; and
2. The Guarantor's independently audited financial statements for the current year-to-date and for the two most recent fiscal years. The financial statements must include the Guarantor's balance sheets, profit and loss statements, and cash flow statements.
C. Requirements for Guarantor.
To serve as a Guarantor, an organization must meet the following requirements:
1. Be a legal entity authorized to conduct business within a State of the United States.
2. Not be under Federal or State bankruptcy or rehabilitation proceedings.
3. Have an adjusted net worth (not including other guarantees, intangibles and restricted reserves) equal to three times the amount of the PDP Sponsor guarantee.
4. If a State insurance commissioner regulates the Guarantor, or other State official with authority for risk-bearing entities, it must meet the adjusted net worth requirement in this document with all guarantees and all investments in and loans to organizations covered by guarantees excluded from its assets.
5. If the Guarantor is not regulated by a State insurance commissioner, or other similar State official it must meet the adjusted net worth requirement in this document with all guarantees and all investments in and loans to organizations covered by a guarantee and to related parties (subsidiaries and affiliates) excluded from its assets and determination of adjusted net worth.
D. Guarantee document.
If the guarantee request is approved, a PDP Sponsor must upload in HPMS a written guarantee document signed by an appropriate Guarantor. The guarantee document must:
1. State the financial obligation covered by the guarantee;
2. Agree to:
a. Unconditionally fulfill the financial obligation covered by the guarantee; and
b. Not subordinate the guarantee to any other claim on the resources of the Guarantor;
3. Declare that the Guarantor must act on a timely basis, in any case not more than 5 business days, to satisfy the financial obligation covered by the guarantee; and
4. Meet other conditions as CMS may establish from time to time.
E. Reporting requirement.
A PDP Sponsor must submit to CMS the current internal financial statements and annual audited financial statements of the Guarantor according to the schedule, manner, and form that CMS requests.
F. Modification, substitution, and termination of a guarantee.
A PDP Sponsor cannot modify, substitute or terminate a guarantee unless the PDP Sponsor:
1. Requests CMS' approval at least 90 days before the proposed effective date of the modification, substitution, or termination;
2. Demonstrates to CMS' satisfaction that the modification, substitution, or termination will not result in insolvency of the PDP Sponsor; and
3. Demonstrates how the PDP Sponsor will meet the requirements of this section.
G. Nullification.
If at any time the Guarantor or the guarantee ceases to meet the requirements of this section, CMS will notify the PDP Sponsor that it ceases to recognize the guarantee document. In the event of this nullification, a PDP Sponsor must:
1. Meet the applicable requirements of this section within 15 business days; and
2. If required by CMS, meet a portion of the applicable requirements in less than the time period granted in paragraph (G.1.) of this section.
INSTRUCTIONS: Applicants must complete and upload in HPMS the following chart for each contract/administrative services agreement submitted under Section 3.1.1D. Applicants must identify where specifically (i.e., the pdf page number) in each contract/administrative services agreement the following elements are found. |
||
Section |
Requirement |
Location in Subcontract by Page number and Section |
3.1.1D1 |
The parties to the contract |
|
3.1.1D2 |
The functions to be performed by the first tier, downstream, or related entity . 42 CFR §423.505(i)(4)(i) |
|
3.1.1D3 |
Describe the reporting requirements the first tier, downstream, or related entity identified in Section 3.1.1C of the application has to the applicant. 42 CFR §423.505(i)(4)(i) |
|
3.1.1D4 |
Language clearly indicating that the first tier, downstream, or related entity has agreed to participate in your Medicare Prescription Drug Benefit program (except for a network pharmacy if the existing contract would allow participation in this program). |
|
3.1.1D5 |
Contains flow-down clauses requiring the first tier, downstream, or related entity’s activities to be consistent and comply with the Applicant’s contractual obligations as a Part D sponsor. 42 CFR §423.505(i)(3)(iii) |
|
3.1.1D6 |
The payment the first tier, downstream, or related entity will receive for performance under the contract, if applicable. |
|
3.1.1D7 |
Are for a term of at least the one-year contract period for which application is submitted. Note: Where the contract is for services or products to be used in preparation for the next contract year’s Part D operations (marketing, enrollment), the initial term of such contract must include this period of performance (e.g., contracts for enrollment-related services must have a term beginning no later than November 15 extending through the full contract year ending on December 31 of the next year). |
|
3.1.1D8 |
Are signed by a representative of each party with legal authority to bind the entity. |
|
3.1.1D9 |
Language obligating the first tier, downstream, or related entity to abide by all applicable Federal laws and regulations and CMS instructions. 42 CFR §423.505(i)(4)(iv) |
|
3.1.1D10 |
Language obligating the first tier, downstream, or related entity to abide by State and Federal privacy and security requirements, including the confidentiality and security provisions stated in the regulations for the program at 42 CFR §423.136. 42 CFR §423.136 |
|
3.1.1D11 |
Language ensuring that the first tier, downstream, or related entity will make its books and other records available in accordance with 42 CFR 423.505(e)(2) and 42 CFR 423.505(i)(2). Generally stated these regulations give HHS, the Comptroller General, or their designees the right to audit, evaluate and inspect any books, contracts, records, including medical records and documentation involving transactions related to CMS’ contract with the Part D sponsor and that these rights continue for a period of 10 years from the final date of the contract period or the date of audit completion, whichever is later. 42 CFR §423.505 |
|
3.1.1D12 |
Language stating that the first tier, downstream, or related entity will ensure that beneficiaries are not held liable for fees that are the responsibility of the Applicant. 42 CFR §423.505(i)(3)(i) |
|
3.1.1D13 |
Language indicating that any books, contracts, records, including medical records and documentation relating to the Part D program will be provided to either the sponsor to provide to CMS or its designees or will be provided directly to CMS or its designees. 42 CFR §423.505(i)(3)(iv) |
|
3.1.1D14 |
Language ensuring that if the Applicant, upon becoming a Part D sponsor, delegates an activity or responsibility to the first tier, downstream, or related entity, that such activity or responsibility may be revoked if CMS or the Part D sponsor determines the first tier, downstream, or related entity has not performed satisfactorily. Note: The contract/administrative services agreement may include remedies in lieu of revocation to address this requirement. 42 CFR §423.505(i)(4)(ii) |
|
3.1.1D15 |
Language specifying that the Applicant, upon becoming a Part D sponsor, will monitor the performance of the first tier, downstream, or related entity on an ongoing basis. 42 CFR §423.505(i)(4)(iii) |
|
3.1.1D16 |
Language that the Part D sponsor retains the right to approve, suspend, or terminate any arrangement with a pharmacy if the first tier, downstream, or related entity will establish the pharmacy network or select pharmacies to be included in the network. 42 CFR §423.505(i)(5) |
|
3.1.1D17 |
Language that if the first tier, downstream, or related entity will establish the pharmacy network or select pharmacies to be included in the network contain language that payment to such pharmacies (excluding long-term care and mail order) shall be issued, mailed, or otherwise transmitted with respect to all clean claims submitted by or on behalf of pharmacies within 14 days for electronic claims and within 30 days for claims submitted otherwise. 42 CFR §423.505(i)(3)(vi) |
|
3.1.1D18 |
Language that if the first tier, downstream, or related entity will establish the pharmacy network or select pharmacies to be included in the network contain language that if a prescription drug pricing standard is used for reimbursement, identify the source used by the Part D sponsor for the prescription drug pricing standard of reimbursement. 42 CFR §423.505(i)(3)(viii)(B) |
|
3.1.1D19 |
Language that if the first tier, downstream, or related entity will establish the pharmacy network or select pharmacies to be included in the network contain language that if a prescription drug pricing standard is used for reimbursement, a provision that updates to such a standard occur not less frequently than once every 7 days beginning with an initial update on January 1 of each year, to accurately reflect the market price of acquiring the drug. 42 CFR §423.505(i)(3)(viii)(A) |
|
3.1.1D20 |
Language that if the first tier, downstream, or related entity will establish the pharmacy network or select pharmacies to be included in the network contain language requiring that long-term care pharmacies have not less than 30 days (but not more than 90 days) to submit claims to the sponsor for reimbursement under the plan. 42 CFR §423.505(i)(3)(vii) |
|
|
||
INSTRUCTIONS: Applicants must complete and upload in HPMS the following chart (which contains applicable Section 3.11D requirements AND additional requirements specific to Pharmacy Access) for each Retail pharmacy contract template submitted under Section 3.4. Applicants must identify where specifically (i.e., the pdf page number) in each contract template the following elements are found. |
||
The provisions listed below must be in all pharmacy contracts. If contracts reference policies and procedures to with which the pharmacy must comply, provide the relevant documentation as evidence and cite this documentation accordingly. |
||
Section |
Requirement |
Citation |
|
|
|
3.1.1D2 |
The functions to be performed by the first tier, downstream, or related entity. 42 CFR §423.504(i)(4)(i) |
|
3.1.1D3 |
Describes the reporting requirements the first tier, downstream, or related entity identified in Section 3.1.1C of the application has to the Applicant. 42 CFR §423.504(i)(4)(i) |
|
3.1.1D8 |
Language obligating the first tier, downstream, or related entity to abide by all applicable Federal laws and regulations and CMS instructions. 42 CFR §423.504(i)(4)(iv) |
|
3.1.1D9 |
Language obligating the first tier, downstream, or related entity to abide by State and Federal privacy and security requirements, including the confidentiality and security provisions stated in the regulations for the program at 42 CFR §423.136. 42 CFR §423.136 |
|
3.1.1D10 |
Language ensuring that the first tier, downstream, or related entity will make its books and other records available in accordance with 42 CFR 423.505(e)(2) and 42 CFR 423.505(i)(2). Generally stated these regulations give HHS, the Comptroller General, or their designees the right to audit, evaluate and inspect any books, contracts, records, including medical records and documentation involving transactions related to CMS’ contract with the Part D sponsor and that these rights continue for a period of 10 years from the final date of the contract period or the date of audit completion, whichever is later. 42 CFR §423.505 |
|
3.1.1D11 |
Language stating that the first tier, downstream, or related entity will ensure that beneficiaries are not held liable for fees that are the responsibility of the Applicant. 42 CFR §423.505(i)(3)(i) |
|
3.1.1D12 |
Language indicating that any books, contracts, records, including medical records and documentation relating to the Part D program will be provided to either the sponsor to provide to CMS or its designees or will be provided directly to CMS or its designees. 42 CFR §423.505(i)(3)(iv) |
|
3.1.1D13 |
Language ensuring that if the Applicant, upon becoming a Part D sponsor, delegates an activity or responsibility to the first tier, downstream, or related entity, that such activity or responsibility may be revoked if CMS or the Part D sponsor determines the first tier, downstream, or related entity has not performed satisfactorily. Note: The contract may include remedies in lieu of revocation to address this requirement. 42 CFR §423.505(i)(4)(ii) |
|
3.1.1D14 |
Language specifying that the Applicant, upon becoming a Part D sponsor, will monitor the performance of the first tier, downstream, or related entity on an ongoing basis. 42 CFR §423.505(i)(4)(iii) |
|
3.1.1D17 |
Provisions requiring that payment shall be issued, mailed or otherwise transmitted with respect to all clean claims submitted by or on behalf of pharmacies within 14 days for electronic claims and within 30 days for claims submitted otherwise. 42 CFR §423.505(i)(3)(vi) |
|
3.1.1D18 |
For those contracts that use a prescription drug pricing standard for reimbursement, a provision indicating the source used by the Part D sponsor for the prescription drug pricing standard of reimbursement. .42 CFR §423.505(i)(3)(viii)(B) |
|
3.1.1D19 |
For those contracts that use a prescription drug pricing standard for reimbursement, a provision that updates to such a standard occur not less frequently than once every 7 days beginning with an initial update on January 1 of each year, to accurately reflect the market price of acquiring the drug.42 CFR §423.505(i)(3)(viii)(A) |
|
3.4A3 |
Provisions governing submitting claims to a real-time claims adjudication system. 42 CFR §423.505(j) and §423.505(b)(17) Note: Applicant may indicate for I/T/U pharmacies and for certain pharmacies that are allowed to submit claims in the X 12 format that these may be batch processed. |
|
3.4A4 |
Provisions governing providing Part D enrollees access to negotiated prices as defined in 42 CFR 423.100. 42 CFR §423.104(g) |
|
3.4A5 |
Provisions regarding charging/applying the correct cost-sharing amount. 42 CFR §423.104 |
|
3.4A6 |
Provisions governing informing the Part D enrollee at the point of sale (or at the point of delivery for mail order drugs) of the lowest-priced, generically equivalent drug, if one exists for the beneficiary's prescription, as well as any associated differential in price. 42 CFR §423.132 |
|
INSTRUCTIONS: Applicants must complete and upload in HPMS the following chart (which contains applicable Section 3.1.1D requirements AND additional requirements specific to Pharmacy Access) for each Mail Order pharmacy contract template submitted under Section 3.4. Applicants must identify where specifically (i.e., the pdf page number ) in each contract template the following elements are found. |
||
The provisions listed below must be in all pharmacy contracts. If contracts reference policies and procedures with which the pharmacy must comply, provide the relevant documentation as evidence and cite this documentation accordingly. |
||
Section |
Requirement |
Citation |
|
|
|
3.1.1D2 |
The functions to be performed by the first tier, downstream, or related entity. 42 CFR §423.504(i)(4)(i) |
|
3.1.1D3 |
Describes the reporting requirements the first tier, downstream, or related entity identified in Section 3.1.1C of the application has to the Applicant. 42 CFR §423.504(i)(4)(i) |
|
3.1.1D8 |
Language obligating the first tier, downstream, or related entity to abide by all applicable Federal laws and regulations and CMS instructions. 42 CFR §423.504(i)(4)(iv) |
|
3.1.1D9 |
Language obligating the first tier, downstream, or related entity to abide by State and Federal privacy and security requirements, including the confidentiality and security provisions stated in the regulations for the program at 42 CFR §423.136. 42 CFR §423.136 |
|
3.1.1D10 |
Language ensuring that the first tier, downstream, or related entity will make its books and other records available in accordance with 42 CFR 423.505(e)(2) and 42 CFR 423.505(i)(2). Generally stated these regulations give HHS, the Comptroller General, or their designees the right to audit, evaluate and inspect any books, contracts, records, including medical records and documentation involving transactions related to CMS’ contract with the Part D sponsor and that these rights continue for a period of 10 years from the final date of the contract period or the date of audit completion, whichever is later. 42 CFR §423.505 |
|
3.1.1D11 |
Language stating that the first tier, downstream, or related entity will ensure that beneficiaries are not held liable for fees that are the responsibility of the Applicant. 42 CFR §423.505(i)(3)(i) |
|
3.1.1D12 |
Language indicating that any books, contracts, records, including medical records and documentation relating to the Part D program will be provided to either the sponsor to provide to CMS or its designees or will be provided directly to CMS or its designees. 42 CFR §423.505(i)(3)(iv) |
|
3.1.1D13 |
Language ensuring that if the Applicant, upon becoming a Part D sponsor, delegates an activity or responsibility to the first tier, downstream, or related entity, that such activity or responsibility may be revoked if CMS or the Part D sponsor determines the first tier, downstream, or related entity has not performed satisfactorily. Note: The contract may include remedies in lieu of revocation to address this requirement. 42 CFR §423.505(i)(4)(iii) |
|
3.1.1D14 |
Language specifying that the Applicant, upon becoming a Part D sponsor, will monitor the performance of the first tier, downstream, or related entity on an ongoing basis. 42 CFR §423.505(i)(4)(iii) |
|
3.1.1D18 |
For those contracts that use a prescription drug pricing standard for reimbursement, a provision indicating the source used by the Part D sponsor for the prescription drug pricing standard of reimbursement. 42 CFR §423.505(i)(3)(viii)(B) |
|
3.1.1D19 |
For those contracts that use a prescription drug pricing standard for reimbursement, a provision that updates to such a standard occur not less frequently than once every 7 days beginning with an initial update on January 1 of each year, to accurately reflect the market price of acquiring the drug.42 CFR §423.505(i)(3)(viii)(A) |
|
3.4A3 |
Provisions governing submitting claims to a real-time claims adjudication system. 42 CFR §423.505(j) and §423.505(b)(17) |
|
3.4A4 |
Provisions governing providing Part D enrollees access to negotiated prices as defined in 42 CFR 423.100. 42 CFR §423.104(g) |
|
3.4A5 |
Provisions regarding charging/applying the correct cost-sharing amount. 42 CFR §423.104 |
|
3.4A6 |
Provisions governing informing the Part D enrollee at the point of sale (or at the point of delivery for mail order drugs) of the lowest-priced, generically equivalent drug, if one exists for the beneficiary's prescription, as well as any associated differential in price. 42 CFR §423.132 |
|
INSTRUCTIONS: Applicants must complete and upload in HPMS the following chart (which contains applicable Section 3.1.1D requirements AND additional requirements specific to Pharmacy Access) for each Home Infusion pharmacy contract template submitted under Section 3.4. Applicants must identify where specifically (i.e., the pdf page number) in each contract template the following elements are found. |
||
The provisions listed below must be in all pharmacy contracts. If contracts reference policies and procedures with which the pharmacy must comply, provide the relevant documentation as evidence and cite this documentation accordingly. |
||
Section |
Requirement |
Citation |
|
|
|
3.1.1D2 |
The functions to be performed by the first tier, downstream, or related entity. 42 CFR §423.504(i)(4)(i) |
|
3.1.1D3 |
Describes the reporting requirements the first tier, downstream, or related entity identified in Section 3.1.1C of the application has to the Applicant. 42 CFR §423.504(i)(4)(i) |
|
3.1.1D8 |
Language obligating the first tier, downstream, or related entity to abide by all applicable Federal laws and regulations and CMS instructions. 42 CFR §423.504(i)(4)(iv) |
|
3.1.1D9 |
Language obligating the first tier, downstream, or related entity to abide by State and Federal privacy and security requirements, including the confidentiality and security provisions stated in the regulations for the program at 42 CFR §423.136. 42 CFR §423.136 |
|
3.1.1D10 |
Language ensuring that the first tier, downstream, or related entity will make its books and other records available in accordance with 42 CFR 423.505(e)(2) and 42 CFR 423.505(i)(2). Generally stated these regulations give HHS, the Comptroller General, or their designees the right to audit, evaluate and inspect any books, contracts, records, including medical records and documentation involving transactions related to CMS’ contract with the Part D sponsor and that these rights continue for a period of 10 years from the final date of the contract period or the date of audit completion, whichever is later. 42 CFR §423.505 |
|
3.1.1D11 |
Language stating that the first tier, downstream, or related entity will ensure that beneficiaries are not held liable for fees that are the responsibility of the Applicant. 42 CFR §423.505(i)(3)(i) |
|
3.1.1D12 |
Language indicating that any books, contracts, records, including medical records and documentation relating to the Part D program will be provided to either the sponsor to provide to CMS or its designees or will be provided directly to CMS or its designees. 42 CFR §423.505(i)(3)(iv) |
|
3.1.1D13 |
Language ensuring that if the Applicant, upon becoming a Part D sponsor, delegates an activity or responsibility to the first tier, downstream, or related entity, that such activity or responsibility may be revoked if CMS or the Part D sponsor determines the first tier, downstream, or related entity has not performed satisfactorily. Note: The contract may include remedies in lieu of revocation to address this requirement. 42 CFR §423.505(i)(4)(ii) |
|
3.1.1D14 |
Language specifying that the Applicant, upon becoming a Part D sponsor, will monitor the performance of the first tier, downstream, or related entity on an ongoing basis. 42 CFR §423.505(i)(4)(iii) |
|
3.1.1D17 |
Provisions requiring that payment shall be issued, mailed or otherwise transmitted with respect to all clean claims submitted by or on behalf of pharmacies within 14 days for electronic claims and within 30 days for claims submitted otherwise. 42 CFR §423.505(i)(3)(vi) |
|
3.1.1D18 |
For those contracts that use a standard for reimbursement, a provision indicating the source used by the Part D sponsor for the standard of reimbursement. 42 CFR §423.505(i)(3)(viii)(B) |
|
3.1.1D19 |
For those contracts that use a standard for reimbursement, a provision that updates to such a standard occur not less frequently than once every 7 days beginning with an initial update on January 1 of each year, to accurately reflect the market price of acquiring the drug.42 CFR §423.505(i)(3)(viii)(A) |
|
3.4A3 |
Provisions governing submitting claims to a real-time claims adjudication system. 42 CFR §423.505(j) and §423.505(b)(17)
Note: Applicant may indicate for I/T/U pharmacies and for certain pharmacies that are allowed to submit claims in the X 12 format that these may be batch processed |
|
3.4A4 |
Provisions governing providing Part D enrollees access to negotiated prices as defined in 42 CFR 423.100. 42 CFR §423.104(g) |
|
3.4A5 |
Provisions regarding charging/applying the correct cost-sharing amount. 42 CFR §423.104 |
|
3.4A6 |
Provisions governing informing the Part D enrollee at the point of sale (or at the point of delivery for mail order drugs) of the lowest-priced, generically equivalent drug, if one exists for the beneficiary's prescription, as well as any associated differential in price. 42 CFR §423.132 |
|
3.4.4A5 |
Provisions ensuring that before dispensing home infusion drugs, pharmacy ensures that the professional services and ancillary supplies are in place.423.120(a)(4)(iii) |
|
3.4.4A6 |
Provisions ensuring that pharmacy that delivers home infusion drugs provides delivery of home infusion drugs within 24 hours of discharge from an acute care setting, or later if so prescribed. 423.120(a)(4)(iv) |
|
INSTRUCTIONS: Applicants must complete and upload in HPMS the following chart (which contains applicable Section 3.1.1D requirements AND additional requirements specific to Pharmacy Access) for each Long-Term Care pharmacy contract template submitted under Section 3.4. Applicants must identify where specifically (i.e., the pdf page number) in each contract template the following elements are found. |
|||
The provisions listed below must be in all pharmacy contracts. If contracts reference policies and procedures with which the pharmacy must comply, provide the relevant documentation as evidence and cite this documentation accordingly. |
|||
Section |
Requirement |
Citation |
|
|
|
|
|
3.1.1D2 |
The functions to be performed by the first tier, downstream, or related entity. 42 CFR §423.504(i)(4)(i) |
|
|
3.1.1D3 |
Describes the reporting requirements the first tier, downstream, or related entity identified in 3.1.1C of the application has to the Applicant. 42 CFR §423.504(i)(4)(i) |
|
|
3.1.1D8 |
Language obligating the first tier, downstream, or related entity to abide by all applicable Federal laws and regulations and CMS instructions. 42 CFR §423.504(i)(4)(iv) |
|
|
3.1.1D9 |
Language obligating the first tier, downstream, or related entity to abide by State and Federal privacy and security requirements, including the confidentiality and security provisions stated in the regulations for the program at 42 CFR §423.136. 42 CFR §423.136 |
|
|
3.1.1D10 |
Language ensuring that the first tier, downstream, or related entity will make its books and other records available in accordance with 42 CFR 423.505(e)(2) and 42 CFR 423.505(i)(2). Generally stated these regulations give HHS, the Comptroller General, or their designees the right to audit, evaluate and inspect any books, contracts, records, including medical records and documentation involving transactions related to CMS’ contract with the Part D sponsor and that these rights continue for a period of 10 years from the final date of the contract period or the date of audit completion, whichever is later. 42 CFR §423.505 |
|
|
3.1.1D11 |
Language stating that the first tier, downstream, or related entity will ensure that beneficiaries are not held liable for fees that are the responsibility of the Applicant. 42 CFR §423.505(i)(3)(i) |
|
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3.1.1D12 |
Language indicating that any books, contracts, records, including medical records and documentation relating to the Part D program will be provided to either the sponsor to provide to CMS or its designees or will be provided directly to CMS or its designees. 42 CFR §423.505(i)(3)(iv) |
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3.1.1D13 |
Language ensuring that if the Applicant, upon becoming a Part D sponsor, delegates an activity or responsibility to the first tier, downstream, or related entity, that such activity or responsibility may be revoked if CMS or the Part D sponsor determines the first tier, downstream, or related entity has not performed satisfactorily. Note: The contract may include remedies in lieu of revocation to address this requirement. 42 CFR §423.505(i)(3)(i) |
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3.1.1D14 |
Language specifying that the Applicant, upon becoming a Part D sponsor, will monitor the performance of the first tier, downstream, or related entity on an ongoing basis. 42 CFR §423.505(i)(4)(ii) |
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3.1.1D20 |
Provisions requiring that the long-term care pharmacy have not less than 30 days (but not more than 90 days) to submit claims to the sponsor for reimbursement under the plan. 42 CFR §423.505(i)(3)(vii) |
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3.1.1D18 |
For those contracts that use a standard for reimbursement, a provision indicating the source used by the Part D sponsor for the standard of reimbursement. 42 CFR §423.505(i)(3)(viii)(B) |
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3.1.1D19 |
For those contracts that use a standard for reimbursement, a provision that updates to such a standard occur not less frequently than once every 7 days beginning with an initial update on January 1 of each year, to accurately reflect the market price of acquiring the drug.42 CFR §423.505(i)(3)(viii)(A) |
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3.4A3 |
Provisions governing submitting claims to a real-time claims adjudication system. 42 CFR §423.505(j) and §423.505(b)(17)
Note: Applicant may indicate for I/T/U pharmacies and for certain pharmacies that are allowed to submit claims in the X 12 format that these may be batch processed. |
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3.4A4 |
Provisions governing providing Part D enrollees access to negotiated prices as defined in 42 CFR 423.100. 42 CFR §423.104(g) |
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3.4A5 |
Provisions regarding charging/applying the correct cost-sharing amount. 42 CFR §423.104 |
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Elements Specific to Long-Term Care Contracts
Note: CMS Long-Term Care Guidance included in Chapter 5 of the Prescription Drug Benefit Manual contains an updated list of performance and service criteria for contracting with long-term care pharmacies. Applicants should, at a minimum, incorporate these criteria in ALL LTC pharmacy network contracts. Applicant must list the criteria below, and then identify where the elements reside in the contract template(s) submitted.
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Performance and Service Criteria |
Citation |
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Comprehensive Inventory and Inventory Capacity – Network Long Term Care Pharmacies [NLTCPs] must provide a comprehensive inventory of Plan formulary drugs commonly used in the long term care setting. In addition, NLTCPs must provide a secured area for physical storage of drugs, with necessary added security as required by federal and state law for controlled substances. This is not to be interpreted that the pharmacy will have inventory or security measures outside of the normal business setting.
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Pharmacy Operations and Prescription Orders -- NLTCPs must provide services of a dispensing pharmacist to meet the requirements of pharmacy practice for dispensing prescription drugs to LTC residents, including but not limited to the performance of drug utilization review (DUR). In addition, the NLTCP pharmacist must conduct DUR to routinely screen for allergies and drug interactions, to identify potential adverse drug reactions, to identify inappropriate drug usage in the LTC population, and to promote cost effective therapy in the LTC setting. The NLTCP must also be equipped with pharmacy software and systems sufficient to meet the needs of prescription drug ordering and distribution to an LTC facility. Further, the NLTCP must provide written copies of the NLTCP’s pharmacy procedures manual and said manual must be available at each LTC facility nurses’ unit. NLTCPs are also required to provide ongoing in-service training to assure that LTC facility staff are proficient in the NLTCP’s processes for ordering and receiving of medications. NLTCP must be responsible for return and/or disposal of unused medications following discontinuance, transfer, discharge, or death as permitted by State Boards of Pharmacy. Controlled substances and out of date substances must be disposed of within State and Federal guidelines.
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Special Packaging -- NLTCPs must have the capacity to provide specific drugs in Unit of Use Packaging, Bingo Cards, Cassettes, Unit Dose or other special packaging commonly required by LTC facilities. NLTCPs must have access to, or arrangements with, a vendor to furnish supplies and equipment including but not limited to labels, auxiliary labels, and packing machines for furnishing drugs in such special packaging required by the LTC setting.
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IV Medications -- NLTCPs must have the capacity to provide IV medications to the LTC resident as ordered by a qualified medical professional. NLTCPs must have access to specialized facilities for the preparation of IV prescriptions (clean room). Additionally, NLTCPs must have access to or arrangements with a vendor to furnish special equipment and supplies as well as IV trained pharmacists and technicians as required to safely provide IV medications.
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Compounding /Alternative Forms of Drug Composition -- NLTCPs must be capable of providing specialized drug delivery formulations as required for some LTC residents. Specifically, residents unable to swallow or ingest medications through normal routes may require tablets split or crushed or provided in suspensions or gel forms, to facilitate effective drug delivery.
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Pharmacist On-call Service -- NLTCP must provide on-call, 24 hours a day, 7 days a week service with a qualified pharmacist available for handling calls after hours and to provide medication dispensing available for emergencies, holidays and after hours of normal operations.
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Delivery Service -- NLTCP must provide for delivery of medications to the LTC facility up to seven days each week (up to three times per day) and in-between regularly scheduled visits. Emergency delivery service must be available 24 hours a day, 7 days a week. Specific delivery arrangements will be determined through an agreement between the NLTCP and the LTC facility. NLTCPs must provide safe and secure exchange systems for delivery of medication to the LTC facility. In addition, NLTCP must provide medication cassettes, or other standard delivery systems, that may be exchanged on a routine basis for automatic restocking. The NLTCP delivery of medication to carts is a part of routine “dispensing”.
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Emergency Boxes -- NLTCPs must provide “emergency” supply of medications as required by the facility in compliance with State requirements.
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Emergency Log Books -- NLTCP must provide a system for logging and charging medication used from emergency/first dose stock. Further, the pharmacy must maintain a comprehensive record of a resident’s medication order and drug administration.
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Miscellaneous Reports, Forms and Prescription Ordering Supplies -- NLTCP must provide reports, forms and prescription ordering supplies necessary for the delivery of quality pharmacy care in the LTC setting. Such reports, forms and prescription ordering supplies may include, but will not necessarily be limited to, provider order forms, monthly management reports to assist the LTC facility in managing orders, medication administration records, treatment administration records, interim order forms for new prescription orders, and boxes/folders for order storage and reconciliation in the facility.
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INSTRUCTIONS: Applicants must complete and upload in HPMS the following chart (which contains applicable Section 3.1.1D requirements AND additional requirements specific to Pharmacy Access) for each I/T/U pharmacy contract template submitted under Section 3.4. Applicants must identify where specifically (i.e., the pdf page number ) in each contract template the following elements are found. |
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The provisions listed below must be in all pharmacy contracts. If contracts reference policies and procedures with which the pharmacy must comply, provide the relevant documentation as evidence and cite this documentation accordingly. |
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Section |
Requirement |
Citation |
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3.1.1D2 |
The functions to be performed by the first tier, downstream, or related entity. 42 CFR §423.504(i)(4)(i) |
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3.1.1D3 |
Describes the reporting requirements the first tier, downstream, or related entity identified in Section 3.1.1C of the application has to the Applicant. 42 CFR §423.504(i)(4)(i) |
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3.1.1D8 |
Language obligating the first tier, downstream, or related entity to abide by all applicable Federal laws and regulations and CMS instructions. 42 CFR §423.504(i)(4)(iv) |
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3.1.1D9 |
Language obligating the first tier, downstream, or related entity to abide by State and Federal privacy and security requirements, including the confidentiality and security provisions stated in the regulations for the program at 42 CFR §423.136. 42 CFR §423.136 |
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3.1.1D10 |
Language ensuring that the first tier, downstream, or related entity will make its books and other records available in accordance with 42 CFR 423.505(e)(2) and 42 CFR 423.505(i)(2). Generally stated these regulations give HHS, the Comptroller General, or their designees the right to audit, evaluate and inspect any books, contracts, records, including medical records and documentation involving transactions related to CMS’ contract with the Part D sponsor and that these rights continue for a period of 10 years from the final date of the contract period or the date of audit completion, whichever is later. 42 CFR §423.505 |
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3.1.1D11 |
Language stating that the first tier, downstream, or related entity will ensure that beneficiaries are not held liable for fees that are the responsibility of the Applicant. 42 CFR §423.505(i)(3)(i) |
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3.1.1D12 |
Language indicating that any books, contracts, records, including medical records and documentation relating to the Part D program will be provided to either the sponsor to provide to CMS or its designees or will be provided directly to CMS or its designees. 42 CFR §423.505(i)(3)(iv) |
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3.1.1D13 |
Language ensuring that if the Applicant, upon becoming a Part D sponsor, delegates an activity or responsibility to the first tier, downstream, or related entity, that such activity or responsibility may be revoked if CMS or the Part D sponsor determines the first tier, downstream, or related entity has not performed satisfactorily. Note: The contract may include remedies in lieu of revocation to address this requirement. 42 CFR §423.505(i)(4)(ii) |
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3.1.1D14 |
Language specifying that the Applicant, upon becoming a Part D sponsor, will monitor the performance of the first tier, downstream, or related entity on an ongoing basis. 42 CFR §423.505(i)(4)(iii) |
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3.1.1D17 |
Provisions requiring that payment shall be issued, mailed or otherwise transmitted with respect to all clean claims submitted by or on behalf of pharmacies within 14 days for electronic claims and within 30 days for claims submitted otherwise. 42 CFR §423.505(i)(3)(vi) |
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3.1.1D18 |
For those contracts that use a standard for reimbursement, a provision indicating the source used by the Part D sponsor for the standard of reimbursement. 42 CFR §423.505(i)(3)(viii)(B) |
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3.1.1D19 |
For those contracts that use a standard for reimbursement, a provision that updates to such a standard occur not less frequently than once every 7 days beginning with an initial update on January 1 of each year, to accurately reflect the market price of acquiring the drug.42 CFR §423.505(i)(3)(viii)(A) |
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3.4A3 |
Provisions governing submitting claims to a real-time claims adjudication system. 42 CFR §423.505(j) and §423.505(b)(17)
Note: Applicant may indicate for I/T/U pharmacies and for certain pharmacies that are allowed to submit claims in the X 12 format that these may be batch processed. |
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3.4A4 |
Provisions governing providing Part D enrollees access to negotiated prices as defined in 42 CFR 423.100. 42 CFR §423.104(g) |
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3.4A5 |
Provisions regarding charging/applying the correct cost-sharing amount. 42 CFR §423.104 |
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3.4A6 |
Provisions governing informing the Part D enrollee at the point of sale (or at the point of delivery for mail order drugs) of the lowest-priced, generically equivalent drug, if one exists for the beneficiary's prescription, as well as any associated differential in price. 42 CFR §423.132 |
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Elements Specific to Indian Tribe and Tribal Organization, and Urban Indian Organization (I/T/U) Pharmacy Contracts
Note: Provisions listed below are in the model I/T/U Addendum, located at Appendix XV and at www.cms.hhs.gov/10_RxContracting_SpecialGuidance.asp#TopOfPage and all I/T/U Contracts must contain language consistent with the model addendum that addresses the following. |
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Item 1 |
Supersession of the addendum from underlying agreement. |
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Item 3 |
The description of the provider. |
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Item 4 |
Counting of costs paid for by provider toward any deductibles. |
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Item 5 |
Persons eligible for services of the provider. |
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Item 6 |
The applicability of certain Federal law. |
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Item 7 |
The non-taxable status of the provider. |
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Item 8 |
Insurance and indemnification. |
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Item 9 |
Applicability of state licensing law to provider’s employees. |
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Item 10 |
Provider eligibility for payments |
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Item 11 |
Dispute resolution. |
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Item 12 |
Federal law as the governing law. |
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Item 13 |
The contract will apply to all pharmacies and dispensaries operated by the provider. |
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Item 14 |
The contract will not affect the provider’s acquisition of pharmaceuticals. |
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Item 15 |
The provider’s point of sale processing capabilities. |
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Item 16 |
Claims processing. |
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Item 17 |
Reasonable and appropriate payment rates. |
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Item 18 |
Any information, outreach or enrollment materials prepared by the Applicant will be supplied at no cost to the provider. |
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Item 19 |
The provider determines the hours of service for the pharmacies or dispensaries of the provider. |
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Item 20 |
Endorsement |
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Item 21 |
Sovereign Immunity |
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This appendix summarizes CMS policy on Part D Applicant/Sponsor and PBM submission of P&T Committee membership, and the accountability that each Part D Applicant/Sponsor holds regarding the integrity of the P&T Committee whose membership is submitted either directly by the Part D Applicant/Sponsor or by the applicant/sponsor’s PBM. This appendix also instructs Part D Applicants (or their PBM’s) on how to submit the Applicant’s P&T Committee membership list, and a Certification of P&T Integrity and Quality in the event the Applicant is planning to operate under a confidentiality agreement with its PBM (such that the PBM does not disclose the membership to the Applicant).
P&T Committee Member Disclosure to CMS
As provided in the regulation at CFR 423.120 (b)(1), a Part D Sponsor’s P&T Committee list must contain a majority of members who are practicing physicians and/or pharmacists, include at least one practicing physician and one practicing pharmacist who are experts regarding care of the elderly or disabled individuals, and includes at least one practicing physician and one practicing pharmacist who are independent and free of conflict relative to the Part D Sponsor or Plan and pharmaceutical manufacturers.
In the event the Part D Applicant/Sponsor has entered into a confidential agreement such that the PBM will not disclose its P&T Committee membership to the Part D Applicant/Sponsor, then it is the Part D Sponsor’s responsibility to notify CMS that this information will be submitted by the Sponsor’s PBM. Moreover, the Part D Applicant/Sponsor must ensure that the PBM notifies CMS of the P&T Committee membership. Also, the Part D Applicant/Sponsor should ensure that the PBM notifies the Sponsor that this information has been successfully submitted to CMS.
Instructions to Plans and PBMs
A. If the Part D Applicant sub-contracts with a PBM for its P&T Committee and operates under a Confidentiality Agreement (such that its members are not disclosed to the Part D Applicant) then the Applicant must (1) complete the attached Certification in HPMS, and (2) forward the attached P&T Committee Member Disclosure form to the sub-contracted PBM and direct the PBM to submit the form to CMS by February 25, 2010. The PBM should email the P&T Committee Member Disclosure form to the following email box: drugbenefitimpl@cms.hhs.gov.
B. In the event of any future changes to the membership of the Part D Sponsor’s P&T Committee or the PBM’s P&T Committee, Part D Sponsors must (or in the case of a confidential agreement the Part D Sponsor) assure that the PBM will notify the appropriate CMS account manager (to be assigned at a future date) and make the correct changes in HPMS on the Contract Management/Part D Data page within 30 days of the effective date of such change.
PHARMACY AND THERAPEUTICS COMMITTEE MEMBER DISCLOSURE
PBM must email the following form to drugbenefitimpl@cms.hhs.gov by February 25, 2010.
Name of Part D Plan or PBM: ______________________________________
If Part D Plan, provide Part D Contract number(s):_________________
Contact Person: ______________________________________
Phone Number: ______________________________________
Email: _____________________________________________
A. Complete the table below.
PROVIDE THE NAMES OF THE MEMBERS OF YOUR ORGANIZATION’S P&T COMMITTEE. INDICATE WHICH MEMBERS ARE PRACTICING PHYSICIANS OR PRACTICING PHARMACISTS. FURTHER, INDICATE WHICH MEMBERS ARE EXPERTS IN THE CARE OF THE ELDERLY OR DISABLED, AND FREE OF ANY CONFLICT OF INTEREST WITH YOUR ORGANIZATION AND PHARMACEUTICAL MANUFACTURERS. (APPLICANTS SHOULD MARK THE INFORMATION AS PROPRIETARY.) SUBMIT THIS DATA BY CREATING A SPREADSHEET IN MICROSOFT EXCEL THAT MIMICS THE TABLE BELOW. |
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Practice/Expertise Mark an ‘X’ in Appropriate Column |
Free of Any Conflict of Interest Type Yes or No |
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Full Name of Member Start Date and End Date |
Practicing Physician |
Practicing Pharmacist |
Elderly/Disabled Expert |
With Your Organization? |
With Pharmaceutical Manufacturers? |
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B. Complete the table below if a PBM submitting on behalf of Part D plan.
PROVIDE THE NAMES OF THOSE APPLICANTS FOR THE PART D BENEFIT FOR WHICH YOUR ORGANIZATION IS PROVIDING PHARMACY BENEFIT MANAGEMENT SERVICES, THE TYPE OF APPLICATION, AND THE CONTRACT NUMBER(S). ADD ADDITIONAL ROWS AS NECESSARY. |
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Organization Name
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Type of Application |
Contract Number(s) |
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Applicant must upload in HPMS:
CERTIFICATION FOR PART D SPONSORS USING A PHARMACY BENEFIT MANAGER’S PHARMACY& THERAPEUTICS COMMITTEE UNDER A CONFIDENTIALITY AGREEMENT
A. I, attest, on behalf of LEGAL NAME OF PART D SPONSOR APPLICANT (“Applicant”), to the following:
1) I certify that APPLICANT has entered into a contract with LEGAL NAME OF PBM (“PBM”) to perform pharmacy benefit management services related to the operation of a Medicare Part D benefit plan(s) on behalf of APPLICANT.
2) I agree, to the best of my knowledge, that “PBM,” has a Pharmacy and Therapeutics (P&T) Committee that contains a majority of members who are practicing physicians and/or pharmacists, includes at least one practicing physician and one practicing pharmacist who are experts regarding the care of the elderly or disabled individuals, and includes at least one practicing physician and one practicing pharmacist who are independent and free of conflict relative to my plan and organization and pharmaceutical manufacturers.
3) I agree that the PBM will supply to CMS the following information, including but not limited to, the full legal name of each member of its P&T Committee designated as a practicing physician or pharmacist specializing in elderly and/or disabled care. Each member must also disclose any conflict of interest with my organization, and/or pharmaceutical manufacturers.
4) I agree that my organization will establish policies and procedures to ensure and confirm the ongoing integrity, qualifications and expertise of the PBM’s P&T Committee.
5) I agree that in the event CMS identifies a PBM’s P&T Committee member is listed on the OIG exclusion list, my organization will be notified by CMS of such a problem. In such an instance, my organization must assure that the PBM takes appropriate steps to correct the problem or my organization will be at risk of being subject to a corrective action plan and sanctions, depending on the nature of the problem.
B. I agree that CMS may inspect the records and premises of my organization or
my subcontractor (first tier, downstream and related entities) to ensure
compliance with the statements to which I have attested above.
C. I certify that I am authorized to sign on behalf of the Applicant.
Part D Applicant’s Contract Number: _____________________
__________________________ _______________________
Authorized Representative Name (printed) Title
__________________________________ ___________________________
Authorized Representative Signature Date (MM/DD/YYYY)
Accessibility Analysis Instructions
Part D Applicants are strongly encourageds to use network access software that is compliant with Section 508 of the Rehabilitation Act of 1973, as amended by the Workforce Investment Act of 1998 to compile the reports as outlined in this appendix. As of the drafting date of these instructions, the only 508 compliant product to our knowledge is The Quest Analytics Suite™. or GeoNetworks® software to compile the reports as outlined in this appendix. While CMS will still accept pharmacy access reports produced using software that is not Section 508 compliant (for example, GeoNetworks), we cannot provide instructions or technical support for such software (see CMS Administrator EIT Accessibility Policy Statement, March 25, 2008 at http://www.cms.hhs.gov/InfoTechGenInfo/03_Section508.asp).
Organizations that intend to use software other than The Quest Analytics Suite or GeoNetworks, If this is not possible, the Applicant must contact Angela Stanley at angela.stanley@cms.hhs.gov (410.786.9496) no later than January 29, 2010 to determine if analyses provided by an alternative method are acceptable. Alternative methods must produce analyses that will result in data directly comparable to the results produced by The Quest Analytics Suite™ or GeoNetworks®. Applicants that wish to use alternative methods will be required to demonstrate how their analysis is comparable to results produced by either The Quest Analytics Suite™ or GeoNetworks®.
While we Though in many instances CMS provides specific instructions for formatting and compiling plan accessibility reports using The Quest Analytics Suite (the available 508 compliant product), this appendix is not intended to provide step-by-step instructions for the use of the software either software. Instructions and examples provided here were developed using The Quest Analytics Suite version 2007.3 and GeoNetworks version 7.5.2. It is the responsibility of Applicant to ensure that their submission provides adequate information for CMS to determine if each of their offerings meets the retail pharmacy access submission requirements. Please note that these retail pharmacy access reports will be uploaded into HPMS on the appropriate Pharmacy Access Upload page.
I. Instructions for Part D Applicants using The Quest Analytics Suite™
1. Defining the Medicare Beneficiary File
The Medicare Beneficiary File entitled “Beneficiary Count Data” is provided by CMS and can be accessed at the following URL: www.cms.hhs.gov\PrescriptionDrugCovContra\. The Medicare Beneficiary File referenced above contains ZIP Codes and beneficiary counts for Applicants as of September, 2009. Use of this file is required for the accessibility analysis submission.
• Download this file and create a sub-file(s) specific to their service area and/or region(s) and/or state as needed to support the level of analyses required (specified below). Applicants may not use beneficiary counts from other sources in their accessibility analyses.
• Open the Quest Analytics Project file you downloaded and link to the data sub-file in The Quest Analytics Suite by adding an Employee Group and name it “All Beneficiaries”. Applicants may geocode by selecting the “Geocoding Tab” and select “Geocode Now” during this step, or they may defer geocoding the population file until run time.
• Verify that the beneficiary (employee) count in the population file is consistent with the total beneficiary census for the sub-file used as the basis for the analyses. CMS will check the count of beneficiaries provided in the reports against the count of beneficiaries residing in the plan’s service area.
• The most recent version of The Quest Analytics Suite™ assigns an Urban, Suburban, or Rural classification for each Medicare beneficiary record consistent with the definitions specified in 42 CFR §423.100. Select the appropriate options under project preferences.
• Applicants must define three subsets of the Medicare Beneficiary File Extract used in their analyses. These subsets are based on filtering on the designation of urban/suburban/rural assigned in the step above. These three subsets are used in the accessibility reports.
• To define the subset of Urban beneficiaries, navigate to Employee Groups resource and Copy the All Beneficiaries group. Change the name to “Urban Beneficiaries” and on the zip code filter, turn off the suburban and rural check boxes.
• To define the subset of Suburban beneficiaries, navigate to Employee Groups resource and Copy the All Beneficiaries group. Change the name to “Suburban Beneficiaries” and on the zip code filter, turn off the urban and rural check boxes.
• To define the subset of Rural beneficiaries, navigate to Employee Groups resource and Copy the All Beneficiaries group. Change the name to “Rural Beneficiaries” and on the zip code filter, turn off the urban and suburban check boxes.
• Verify that the urban, suburban, and rural definitions are defined appropriately for each page of the report. CMS will compare the total of urban, suburban, and rural beneficiaries for specific counties to totals derived from the Medicare Beneficiary File.
• The Quest Analytics Suite™ default restricts beneficiaries inside your service area.
• Applicants may specify that contracted providers outside their service area (e.g., across state or county lines) be included in their accessibility analyses. The most recent release of The Quest Analytics Suite™ allows for inclusion of providers outside the specified service area under the report area options.
2. Defining the Provider File
Applicants must use their listing of contracted Part D retail pharmacies. The listing used in these analyses must be consistent with the pharmacy listing provided under the instructions in Section 3.4.1C of this solicitation that includes address information to define their provider file. If an Applicant used more than one retail pharmacy network to provide the Part D benefit, the network must be combined in the analysis (and the submission provided under Section 3.4.1B of this solicitation to represent one complete Part D network).
• Applicant may use representative ZIP Geocoding or the more precise geocoding methods for pharmacy providers (i.e., the ZIP+ 4 Centroid Method, the ZIP+2 Centroid Method, or address-based geocoding). CMS strongly encourages the use of more precise methods for geocoding. Use of address-based geocoding will prevent, in some market areas, false indications that access standards are not met.
• The Quest Analytics Suite™ will automatically geocode your provider file using an “address-based” method (if licensed). If this function is not available on your version of Quest Analytics Suite™, the default, distributive geocoding methodology, is acceptable.
• Define the Provider Group by navigating to Add Provider Groups. Select the data source on the Source Table button. On the Name enter the label of “Part D Retail Pharmacy Network”, select OK.
• Verify that the total counts for pharmacy providers in the report do not exceed the count of pharmacies in your Part D contracted retail pharmacy listing that must also be provided using the retail listing template provided in HPMS.
3. Defining Access Criteria
• The Applicant must define access standards in accordance with the Part D standards, as defined in 42 CFR § 423.120(a)(1).
• The Urban access standard of 1 provider within 2 miles is predefined within the Quest project file that you downloaded.
• The Suburban access standard of 1 provider within 5 miles is predefined within the Quest project file that you downloaded.
• The Rural access standard of 1 provider within 15 miles is predefined within the Quest project file that you downloaded.
4. Defining the Plan Service Area
Applicants should define their service area based on the service area for the entire contract. The service area defined in your report must EXACTLY match the service area you have specified in HPMS.
PDP Applicants
PDPs and RPPOs are required to demonstrate the accessibility standards at the state level. Applicants must also present access statistics at the county level. Please note that it is not a requirement for PDP (or RPPO) Applicants to provide access summary statistics at the region level.
• Define the service area by navigating to Service Area and Add and select your service area.
• Verify that the service area in your report EXACTLY matches the service area you have entered in HPMS. New Applicants must include all regional (and their component States) in their report.
• Verify that the reports provided to CMS include subtotals for each individual state and grand total summary statistics encompassing all states in the service area.
An example analysis is provided in the file entitled “CMS Quest Analytics Example PDP” that is included in the reference file entitled “Geographic Access Examples and Templates” that may be downloaded from the following URL: www.cms.hhs.gov\PrescriptionDrugCovContra\.
5. Generating the Accessibility Analyses Reports
A Quest Analytic report template entitled “CMS Quest Analytics Template PDP.qp” is provided for PDP Applicants in the reference file entitled “Geographic Access Examples and Templates” that may be downloaded from the following URL: www.cms.hhs.gov\PrescriptionDrugCovContra\. This template includes all the report pages and access standards along with the applicable sorting options and may be imported to create the required Quest Analytic reports.
6. Providing copies of the Analysis to CMS for review
Applicants must upload their report in Adobe Acrobat readable (*.pdf) format into HPMS.
II. Instructions for Part D Applicants using GeoNetworks®
1. Defining the Medicare Beneficiary File
The Medicare Beneficiary File entitled “Beneficiary Count Data” is provided by CMS and can be accessed at the following URL: www.cms.hhs.gov/PrescriptionDrugCovContra/. The Medicare Beneficiary File referenced above contains ZIP Codes and beneficiary counts for Applicants as of September, 2009. Use of this file is required for the accessibility analysis submission.
• Download this file and create a sub-file(s) specific to their service area and/or region(s) and/or state as needed to support the level of analyses required (specified below). Applicants may not use beneficiary counts from other sources in their accessibility analyses.
• Import the data sub-file into GeoNetworks® to create a geo-coded population file based on the Census data sub-file. A population file is created by navigating to Data > Populate > From File> “select and open the file”. Applicants may geocode by selecting the “geocode after populate” check box during this step, or they may geocode the population file in a later step outlined below.
• Verify that the beneficiary (employee) count in the population file is consistent with the total beneficiary census for the sub-file used as the basis for the analyses. CMS will check the count of beneficiaries provided in the reports against the count of beneficiaries residing in the plan’s service area.
• Assign an Urban, Suburban, or Rural indicator to each Medicare beneficiary record in the Population file using the GeoNetworks® function, “Assign Place Names.” Place names may be assigned by navigating to Data > Assign Place Names > Selecting and opening the file. The Input field should be set to “ZIP”. The default place name classification “STD_CLASS” will assign a Urban (U), Suburban (S), or Rural (R) designation to ZIP codes consistent with the definitions specified in 42 CFR § 423.100.
• If geocodes are not assigned when the population file is created, Applicants may assign geocodes by navigating to Data > Assign Geocodes > Select and open file > Click OK. Applicants must use “representative” geocoding as the method to assign locations to each record in the Population file. This is the default GeoNetworks® method of assignment of geocodes when no address information is provided in the file (i.e., in this instance).
• Applicants must define one employee group for all beneficiaries using the Medicare Beneficiary File Extract used in their analyses. The “all beneficiaries file” is used in the service area report.
• Define a single “all beneficiaries file” by navigating to Define > Employee Groups > Add > on the Connection tab, select the data source > on the Filter Tab no tests should be set > Under the Options tab, enter the label of “All Beneficiaries” in the Description field and specify that Service Area Restriction is set to “inside”> click OK.
• Applicants must define three subsets of the Medicare Beneficiary File Extract used in their analyses. These subsets are based on filtering on the designation of urban/suburban/rural assigned in the step above. These three subsets are used in the accessibility reports.
• To define the subset of Urban beneficiaries, navigate to Define > Employee Groups > Add > on the Connection tab, select the data source > on the Filter Tab, select “filename.STD_CLASS” as the field > “Test” should be “=” (equal to) > Value should be ‘U’ (Note: the single quotes signify a text field) > Under the Options tab, enter the label of “Urban Beneficiaries” in the Description field and specify that Service Area Restriction is set to “inside”> click OK.
• To define the subset of Suburban beneficiaries, navigate to Define > Employee Groups > Add > on the Connection tab, select the data source > on the Filter Tab, select “filename.STD_CLASS” as the field > “Test” should be “=” (equal to) > Value should be ‘S’ (Note: the single quotes signify a text field) > Under the Options tab, enter the label of “Suburban Beneficiaries” in the Description field and specify that Service Area Restriction is set to “inside”> click OK.
• To define the subset of Rural beneficiaries, navigate to Define > Employee Groups > Add > on the Connection tab, select the data source > on the Filter Tab, select “filename.STD_CLASS” as the field > Test should be “=” (equal to) > Value should be ‘R’ (Note: the single quotes signify a text field) > Under the Options tab, enter the label of “Rural Beneficiaries” in the Description field and specify that Service Area Restriction is set to “inside”> click OK.
• Verify that the urban, suburban, and rural definitions are defined appropriately for each page of the report. CMS will compare the total of urban, suburban, and rural beneficiaries for specific counties to totals derived from the Medicare Beneficiary File.
• Verify that only beneficiaries within your service area are included in the report. This setting can be checked under the Options tab, in the Service Area Restriction box. The “within” radio button should be selected.
2. Defining the Provider File in GeoNetworks®
Applicants must use their listing of contracted Part D retail pharmacies. The listing used in these analyses must be consistent with the pharmacy listing provided under the instructions in Section 3.4.1C of this solicitation that includes address information to define their provider file. If an Applicant used more than one retail pharmacy network to provide the Part D benefit, the network must be combined in the GeoNetworks® analysis (and the submission provided under Section 3.4.1B of this solicitation to represent one complete Part D network).
• Applicant may use representative ZIP Geocoding or the more precise geocoding methods for pharmacy providers (i.e., the ZIP+ 4 Centroid Method, the ZIP+2 Centroid Method, or address-based geocoding). CMS strongly encourages the use of more precise methods for geocoding. Use of address-based geocoding will prevent, in some market areas, false indications that access standards are not met.
• Define Geocodes for their provider file by navigating to Data > Assign Geocodes > Select and open the provider file > Click OK. To the extent possible, CMS recommends that Applicants use “address-based” geocoding as to assign locations to pharmacies as it is more precise. If this function is not available on your version of GeoNetworks®, the default, representative geocoding, methodology is acceptable.
• Define the Provider Group by navigating to Define > Provider Groups > Add > on the Connection tab, select the data source > on the Options tab, enter the label of “Part D Retail Pharmacy Network” in the Description field > Select OK.
• Verify that the total counts for pharmacy providers in the GeoNetworks® report do not exceed the count of pharmacies in your Part D contracted retail pharmacy listing that must also be provided using the retail listing template provided in HPMS
3. Defining Access Criteria in GeoNetworks®
The Applicant must define access standards in accordance with the Part D standards, as defined in 42 CFR § 423.120 (a)(1).
• To define the Urban access standard, navigate to Define > Access Standards > Add > in the Description field, type “Urban: 1 provider within 2 miles” > Ensure that the Number of Providers is 1, the Test is within, and Miles is 2 > Click OK.
• To define the Suburban access standard, navigate to Define > Access Standards > Add > in the Description field, type “Suburban: 1 provider within 5 miles” > Ensure that the Number of Providers is 1, the Test is within, and Miles is 5 > Click OK.
• To define the Rural access standard, navigate to Define > Access Standards > Add > in the Description field, type “Rural: 1 provider within 15 miles” > Ensure that the Number of Providers is 1, the Test is within, and Miles is 15 > Click OK.
4. Defining the Plan Service Area in GeoNetworks®
Applicants should define their service area based on the service area for the entire contract. The service area defined in your GeoNetworks® report must EXACTLY match the service area you have specified in HPMS.
PDP Applicants
PDPs and RPPOs are required to demonstrate the accessibility standards at the state level. Applicants must also present access statistics at the county level. Please note that it is not a requirement for PDP (or RPPO) Applicants to provide summary statistics related to the accessibility standards at the region level.
• Define the service area by navigating to Define > Service Areas > Add > Use buttons on right to select your service area.
• Verify that the service area defined in your GeoNetworks® report EXACTLY matches the service area you have entered in HPMS. New applicants MUST include all regional (and their component States) in their GeoNetworks® report. SAE applicants MUST include only new regions (and their component States) in their GeoNetworks® report.
• Verify that the reports provided to CMS include subtotals for each individual state and grand total summary statistics encompassing all states in the service area. For SAE applicants the reports provided to CMS should include subtotals for each individual state and grand total summary statistics encompassing all states in the expansion area.
5. Generating the Accessibility Analyses Reports in GeoNetworks®
PDP Reports
Including the title, the table of contents, and the GeoNetworks run report, a seven (7) item report must be generated. The following set of instructions references the CMS example for S0000 and, following all of the report development specifications, should result in the items listed in Table I. Please note that while the example and corresponding instructions reference a PDP submission, the same instructions apply for preparing an RPPO submission. Applicants should ensure that they: (1) use the appropriate employee group (i.e. the Beneficiary Count file you derived from the CMS provided reference file), (2) use the correct definition of the access standards, (3) use the correct definition of your service area (including both current and SAE areas for SAE Applicants); and (4) provide analyses with “all” beneficiary specification in order to provide CMS with a summary of the service area included in your report. (5) CMS also requests the inclusion of the summary report that provides information about the set-up and run date of the analysis. This summary report is automatically generated by GeoNetworks®. An example of the PDP GeoAccess reports with the file name, “GeoNetworks PDP Example.tif” is provided for PDP Applicants in the reference file entitled “Geographic Access Examples and Templates” that may be downloaded from the following URL: www.cms.hhs.gov\PrescriptionDrugCovContra\.
Table I Example S0000 Report Pages Specification |
|||||||
Rpt # |
Page |
Summarized by |
Employee Group |
Provider Group |
Access Standard |
Service Area / Title 1 |
Access Filter |
1 |
Title |
|
|
|
|
|
|
2 |
Table of Contents |
|
|
|
|
|
|
3 |
Accessibility Detail |
County |
Urban PDP Region 05 Beneficiaries |
PDP Region 05 Part D Retail Pharmacy Network |
Urban: 1 provider within 2 miles |
S0000 |
All |
4 |
Accessibility Detail |
County |
Suburban PDP Region 05 Beneficiaries |
PDP Region 05 Part D Retail Pharmacy Network |
Suburban: 1 provider within 15 miles |
S0000 |
All |
5 |
Accessibility Detail |
County |
Rural PDP Region 05 Beneficiaries |
PDP Region 05 Part D Retail Pharmacy Network |
Rural: 1 provider within 15 miles |
S0000 |
All |
6 |
Service Area |
State |
All Beneficiaries |
Part D Retail Pharmacy Network |
|
S0000 |
|
7 |
GeoNetworks Report (auto generated summary information report to be included in submission) |
|
|
|
|
|
|
• Title Page
• To add a title page, navigate to Page > Add > Title Page.
• Table of Contents
• To add a table of contents, navigate to Page > Add > Table of Contents. Double click on the new Table of Contents page. Under the Options tab select Tab leaders, Page specifications, and Roman page numbers to be included in the report.
• Accessibility Detail pages should be generated to represent urban/suburban/rural beneficiaries with and without access the service area defined. There should be three Accessibility Detail reports. The title in the accessibility detail report should specify the network represented in the pharmacy list. For each accessibility analysis, a report is created that provides the percentage of beneficiaries with access and the percentage of beneficiaries without access. Both the with and without access statistics should appear together on each of the urban/suburban/rural reports. Statistics for each individual county within the service area and statistics for each State (in total) must be provided.
• Defining the accessibility detail report for urban beneficiaries in the service area for S0000 requires the following steps:
• Navigate to Page > Add > Accessibility Detail > Double click on the page that appears
• Under the Specifications tab for the new Accessibility Detail Page set Employee Group to be your urban beneficiaries, set Provider Group to be “Part D Pharmacy Network 1”, set Access Standard to be “Urban: 1 provider within 2 miles”, set Access filter to “all”, and set Service Area to S0000
• Under the Options tab for the new Accessibility Detail Page, select to summarize by county, and under show, ensure that the following options are checked: state, percent in filter, number in filter, number of providers, subtotals and totals.
• Under the Titles Page, uncheck the default Title 1 and specify a title that describes the unique service area. In this instance the title would be “PDP Region 05: Mid-Atlantic (DE, DC, MD)”
• The steps above are repeated, with appropriate modifications, for suburban and rural beneficiaries.
• The steps to define the service area report for all beneficiaries with access in the region for S0000 are as follows:
• Navigate to Page > Add > Service Area Detail > Double click on the page that appears.
• Under the Specifications tab for the new Service Area Detail Page set Employee Group to be all beneficiaries, set Provider Group to be “Part D Retail Network 1”, set Service Area to S0000.
• Under the Options tab for the new Service Area Detail Page, select to summarize by state, set service area filter to inside, ensure that the following options are checked: number of employees, number of providers, and totals.
• Under the Titles tab, uncheck the default Title 1 and specify a title that describes the service area. In this instance the title would be “PDP Region 05: Mid-Atlantic (DE, DC, and MD)”.
• Ensure that no specifications are indicated under the Include tab.
• Under the Sort tab ensure that sort order is State (ascending), then County (ascending).
• As part of the submission for each contract report Applicants should include the “Report Information” page. This page is generated automatically when the GeoNetworks® report is run.
6. Providing copies of the GeoNetworks® Analysis to CMS for review
Applicants must upload their GeoNetworks® report in Adobe Acrobat readable (*.pdf) format into HPMS.
In HPMS, download the following data use agreement and upload the completed document.
The sponsor shall restrict its use and disclosure of Medicare data obtained from CMS information systems (listed below) to those purposes directly related to the administration of the Medicare managed care and/or outpatient prescription drug benefits for which it has contracted with the Centers for Medicare & Medicaid Services (CMS) to administer. The sponsor shall only maintain data obtained from CMS information systems that is needed to administer the Medicare managed care and/or outpatient prescription drug benefits that it has contracted with CMS to administer. The sponsor (or its subcontractors (first tier, downstream and related entities) ) may not re-use or provide other entities access to the CMS information system, or data obtained from the system, to support any line of business other than the Medicare managed care and/or outpatient prescription drug benefit for which the sponsor has contracted with CMS. CMS may terminate the sponsor’s access to the CMS data systems immediately upon determining that the sponsor has used its access to a data system, or data obtained from such systems, beyond the scope for which CMS has authorized under this agreement. A termination of this data use agreement may result in CMS terminating the sponsor’s Medicare contract(s) on the basis that it is no longer qualified as a Medicare sponsor. This agreement shall remain in effect as long as the sponsor remains a Medicare managed care organization and/or outpatient prescription drug benefit sponsor. This agreement excludes any public use files or other publicly available reports or files that CMS makes available to the general public on our website.
_________________________ ______________________________
Legal Entity Name Contract Number
__________________________ ______________________________
Authorized Representative Name (printed) Title
__________________________________ ______________________________
Authorized Representative Signature Date (MM/DD/YYYY)
CMS Information Systems to which the Data Use Attestation Applies
The following list contains a representative (but not comprehensive) list of CMS information systems to which the Data Use Attestation applies. CMS will update the list periodically as necessary to reflect changes in the agency’s information systems.
Automated Plan Payment System (APPS)
Common Medicare Environment (CME)
Common Working File (CWF)
Coordination of Benefits Contractor (COBC)
Drug Data Processing System (DDPS)
Electronic Correspondence Referral System (ECRS)
Enrollment Database (EDB)
Financial Accounting and Control System (FACS)
Front End Risk Adjustment System (FERAS)
Health Plan Management System (HPMS), including Complaints Tracking and all other modules
HI Master Record (HIMR)
Individuals Authorized Access to CMS Computer Services (IACS)
Integrated User Interface (IUI)
Medicare Advantage Prescription Drug System (MARx)
Medicare Appeals System (MAS)
Medicare Beneficiary Database (MBD)
Payment Reconciliation System (PRS)
Premium Withholding System (PWS)
Prescription Drug Event Front End System (PDFS)
Retiree Drug System (RDS)
Risk Adjustments Processing Systems (RAPS)
Note: All Part D sponsors will be required to use the attached revised version of the I/T/U Addendum. Existing Part D sponsors will be required to use this version of the I/T/U Addendum for any future re-contracting or new contracting.
Indian Health Addendum to Medicare Part D Plan Agreement
1. Purpose of Indian Health Addendum; Supersession.
The purpose of this Indian Health Addendum is to apply special terms and conditions to the agreement by and between __________________________(herein “Part D Sponsor”) and _____________________________(herein “Provider”) for administration of Medicare Prescription Drug Benefit program at pharmacies and dispensaries of Provider authorized by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, and implementing regulations in Parts 403, 411, 417, 422, and 423 of Title 42, Code of Federal Regulations. To the extent that any provision of the Part D Sponsor’s agreement or any other addendum thereto is inconsistent with any provision of this Indian Health Addendum, the provisions of this Indian Health Addendum shall supercede all such other provisions.
2. Definitions.
For purposes of the Part D Plan Sponsor's agreement, any other addendum thereto, and this Indian Health Addendum, the following terms and definitions shall apply:
(a) The term "Part D Plan Sponsor" means a nongovernmental entity that is certified under 42 CFR 417.472, 42 CFR Part 423 or 42 CFR Part 422 as meeting the requirements and standards that apply to entities that offer Medicare Part D plans.
(b) The terms "Part D Plan" means prescription drug coverage that is offered under a policy, contract, or plan that has been approved as specified in 42 CFR 423.272, 42 CFR 422.502 or 42 CFR 417.472 and that is offered by a PDP sponsor that has a contract with the Centers for Medicare and Medicaid Services that meets the contract requirements under subpart K of 42 CFR Part 423 or subpart K of 42 CFR Part 422.
(c) The term "Provider" means the Indian Health Service (IHS) and all pharmacies and dispensaries operated by the IHS, or an Indian tribe, tribal organization or urban Indian organization which operates one or more pharmacies or dispensaries, and is identified by name in Section 1 of this Indian Health Addendum.
(d) The term "Centers for Medicare and Medicaid Services" means the agency of that name within the U.S. Department of Health and Human Services.
(e) The term "Indian Health Service" means the agency of that name within the U.S. Department of Health and Human Services established by Sec. 601 of the Indian Health Care Improvement Act (“IHCIA”), 25 USC §1661.
(f) The term "Indian tribe" has the meaning given that term in Sec. 4 of the IHCIA, 25 USC §1603.
(g) The term "tribal organization" has the meaning given than term in Sec. 4 of the IHCIA, 25 USC §1603.
(h) The term "urban Indian organization" has the meaning given that term in Sec. 4 of the IHCIA, 25 USC §1603.
(i) The term "Indian" has the meaning given to that term in Sec. 4 of the IHCIA, 25 USC §1603.
(j) The term "dispensary" means a clinic where medicine is dispensed by a prescribing provider.
3. Description of Provider.
The Provider identified in Section 1 of this Indian Health Addendum is (check appropriate box):
/_/ IHS operated health care facilities located within the geographic area covered by the Provider Agreement, including hospitals, health centers and one or more pharmacies or dispensaries (“IHS Provider”). Where an IHS Provider operates more than one pharmacy or dispensary all such pharmacies and dispensaries are covered by this Addendum.
/_/ An Indian tribe that operates a health program, including one or more pharmacies or dispensaries, under a contract or compact with the Indian Health Service issued pursuant to the Indian Self-Determination and Education Assistance Act, 25 USC §450 et seq.
/_/ A tribal organization authorized by one or more Indian tribes to operate a health program, including one or more pharmacies or dispensaries, under a contract or compact with the Indian Health Service issued pursuant to the Indian Self-Determination and Education Assistance Act, 25 USC §450 et seq.
/_/ An urban Indian organization that operates a health program, including one or more pharmacies or dispensaries, under a grant from the Indian Health Service issued pursuant to Title V of the IHCIA.
4. Deductibles.
The cost of pharmaceuticals provided at a pharmacy or dispensary of Provider or paid for by the Provider through a referral to a retail pharmacy shall count toward the deductible applicable to an IHS beneficiary enrolled in a Part D Plan.
5. Persons eligible for services of Provider.
(a) The parties agree that the IHS Provider is limited to serving eligible IHS beneficiaries pursuant to 42 CFR Part 136 and section 813(a) of the IHCIA, 25 USC §1680c-(a) who are also eligible for Medicare Part D services pursuant to Title XVIII, Part D of the Social Security Act and 42 CFR Part 423. The IHS Provider may provide services to non-IHS eligible persons only under certain circumstances set forth in IHCIA section 813(b) and in emergencies under section 813(c) of the IHCIA.
(b) The parties agree that the persons eligible for services of the Provider who is an Indian tribe or a tribal organization or a Provider who is an urban Indian organization shall be governed by the following authorities:
(1) Title XVIII, Part D of the Social Security Act and 42 CFR Part 423;
(2) IHCIA sections 813(a) and 813(c), 25 USC §1680c (a) and (c);
(3) 42 CFR Part 136; and
(4) The terms of the contract, compact or grant issued to the Provider by the IHS for operation of a health program.
(c) No clause, term or condition of the Part D Plan Sponsor's agreement or any addendum thereto shall be construed to change, reduce, expand or alter the eligibility of persons for services of the Provider under the Part D Plan that is inconsistent with the authorities identified in subsection (a).
6. Applicability of other Federal laws.
Federal laws and regulations affecting a Provider, include but are not limited to the following:
(a) An IHS provider:
(1) The Anti-Deficiency Act 31 U.S.C. § 1341;
(2) The Indian Self Determination and Education Assistance Act (“ISDEAA”); 25 USC § 450 et seq.;
(3) The Federal Tort Claims Act (“FTCA”), 28 U.S.C. § 2671-2680;
(4) The Federal Medical Care Recovery Act, 42 U.S.C. §§ 2651-2653;
(5) The Federal Privacy Act of 1974 (“Privacy Act”), 5 U.S.C. § 552a, 45 CFR Part 5b;
(6) Confidentiality of Alcohol and Drug Abuse Patient Records, 42 CFR Part 2;
(7) The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), 45 CFR Parts 160 and 164; and
(8) The IHCIA, 25 U.S.C. § 1601 et seq.
(b) A Provider who is an Indian tribe or a tribal organization:
(1) The ISDEAA, 25 USC §450 et seq.;
(2) The IHCIA, 25 USC §1601, et seq.;
(3) The FTCA, 28 USC §§2671-2680;
(4) The Privacy Act, 5 USC §552a and regulations at 45 CFR Part 5b; and
(5) The HIPAA and regulations at 45 CFR parts 160 and 164.
(c) A Provider who is an urban Indian organization:
(1) The IHCIA, 25 USC §1601, et seq.;
(2) The Privacy Act, 5 USC §552a and regulations at 45 CFR Part 5b;
(3) The HIPAA and regulations at 45 CFR parts 160 and 164.
7. Non-taxable entity.
To the extent the Provider is a non-taxable entity, the Provider shall not be required by a Part D Plan Sponsor to collect or remit any Federal, State, or local tax.
8. Insurance and indemnification.
(a) As an IHS provider, FTCA coverage obviates the requirement that IHS carry private malpractice insurance as the United States consents to be sued in place of federal employees for any damages to property or for personal injury or death caused by the negligence or wrongful act or omission of federal employees acting within the scope of their employment. 28 U.S.C. § 2671-2680. Nothing in the Part D Plan Sponsor’s Agreement shall be interpreted to authorize or obligate any IHS employee to perform any act outside the scope of his/her employment. The IHS Provider shall not be required to acquire insurance, provide indemnification, or guarantee that the Plan will be held harmless from liability.
(b) A Provider which is an Indian tribe or a tribal organization shall not be required to obtain or maintain professional liability insurance to the extent such Provider is covered by the Federal Tort Claims Act (FTCA) pursuant to Federal law (Pub.L. 101-512, Title III, §314, as amended by Pub.L. 103-138, Title III, §308 (codified at 25 USC §450 F note); and regulations at 25 CFR Part 900, Subpt. M. To the extent a Provider that is an urban Indian organization is covered by the FTCA pursuant to section 224(g)-(n) of the Public Health Service Act, as amended by the Federally Supported Health Centers Assistance Act, Pub.L. 104-73, (codified at 42 USC §233(g)-(n)) and regulations at 42 CFR Part 6, such Provider shall not be required to obtain or maintain professional liability insurance. Further, nothing in the Part D Plan Sponsor’s agreement or any addendum thereto shall be interpreted to authorize or obligate Provider or any employee of such Provider to operate outside of the scope of employment of such employee, and Provider shall not be required to indemnify the Part D Plan Sponsor.
9. Licensure.
(a) States may not regulate the activities of IHS-operated pharmacies nor require that the IHS pharmacists be licensed in the State where they are providing services, whether the IHS employee is working at an IHS-operated facility or has been assigned to a pharmacy or dispensary of a tribe, tribal organization, or urban Indian organization. The parties agree that during the term of the Part D Plan Sponsor’s Agreement, IHS pharmacists shall hold state licenses in accordance with applicable federal law, and that the IHS facilities where the pharmacies and dispensaries are located shall be accredited in accordance with federal statutes and regulations. During the term of the Part D Plan Sponsor’s Agreement, the parties agree to use the IHS facility’s Drug Enforcement Agency (DEA) number consistent with federal law.
(b) To the extent that any directly hired employee of a tribal or urban Indian Provider is exempt from State regulation, such employee shall be deemed qualified to perform services under the Part D Plan Sponsor's agreement and all addenda thereto, provided such employee is licensed to practice pharmacy in any State. This provision shall not be interpreted to alter the requirement that a pharmacy hold a license from the Drug Enforcement Agency.
10. Provider eligibility for payments.
To the extent that the Provider is exempt from State licensing requirements, the Provider shall not be required to hold a State license to receive any payments under the Part D Plan Sponsor’s agreement and any addendum thereto.
11. Dispute Resolution.
a. For IHS Provider. In the event of any dispute arising under the Participating Part D Plan Sponsor’s Agreement or any addendum thereto, the parties agree to meet and confer in good faith to resolve any such disputes. The laws of the United States shall apply to any problem or dispute hereunder that cannot be resolved by and between the parties in good faith. Notwithstanding any provision in the Part D Plan Sponsor’s Agreement or any addendum thereto to the contrary, IHS shall not be required to submit any disputes between the parties to binding arbitration.
b. For Tribal and Urban Providers. In the event of any dispute arising under the Participating Part D Plan Sponsor’s Agreement or any addendum thereto, the parties agree to meet and confer in good faith to resolve any such disputes. Any dispute hereunder that cannot be resolved by and between the parties in good faith shall be submitted to the dispute resolution procedure pursuant to the Participating Part D Plan Sponsor’s Agreement.
12. Governing Law.
The Part D Plan Sponsor's agreement and all addenda thereto shall be governed and construed in accordance with Federal law of the United States. In the event of a conflict between such agreement and all addenda thereto and Federal law, Federal law shall prevail. Nothing in the Part D Plan Sponsor's agreement or any addendum thereto shall subject an Indian tribe, tribal organization, or urban Indian organization to State law to any greater extent than State law is already applicable.
13. Pharmacy/Dispensary Participation.
The Part D Plan Sponsor's agreement and all addenda thereto apply to all pharmacies and dispensaries operated by the Provider, as listed on the attached Schedule -------- to this Indian Health Addendum. A pharmacy is required to use a National Council for Prescription Drug Programs (NCPDP) provider number for reimbursement. To the extent a dispensary does not have a NCPDP provider number, it is required to use an NCPDP Alternate Site Enumeration Program (ASEP) number for reimbursement.
14. Acquisition of Pharmaceuticals.
Nothing in the Part D Plan Sponsor's agreement and all addenda thereto shall affect the Provider’s acquisition of pharmaceuticals from any source, including the Federal Supply Schedule and participation in the Drug Pricing Program of Section 340B of the Public Health Service Act. Nor shall anything in such agreement and all addenda thereto require the Provider to acquire drugs from the Part D Plan Sponsor or from any other source.
15. Drug Utilization Review/Generic Equivalent Substitution.
Where the Provider lacks the capacity to comply with the information technology requirements for drug utilization review and/or generic equivalent substitution set forth in the Part D Plan Sponsor's agreement, the Provider and Part D Plan Sponsor agree that the Provider shall comply with the Part D Plan Sponsor's drug utilization review and/or generic equivalent substitution policies and procedures through an alternative method. Nothing in this paragraph shall be interpreted as waiving the applicability of the drug utilization review and/or generic equivalent substitution policies and procedures adopted by Part D sponsor in accordance with 42 C.F.R.§§ 423.153(b) and (c), as approved by CMS, to covered Part D drugs dispensed by the Provider to enrollees in the Part D Plan[s]. As specified at 42 C.F.R. §423.132(c)(3), the requirements related to notification of price differentials is waived for the Provider .
16. Claims.
The Provider may submit claims to the Part D Plan by telecommunication through an electronic billing system or by calling a toll-free number for non-electronic claims; in the case of the latter, Provider shall submit a confirmation paper claim.
17. Payment Rate.
Claims from the provider shall be paid at rates that are reasonable and appropriate.
18. Information, Outreach, and Enrollment Materials.
(a) All materials for information, outreach, or enrollment prepared for the Part D Plan shall be supplied by the Part D Plan Sponsor to Provider in paper and electronic format at no cost to the Provider.
(b) All marketing or informational material listing a provider as a pharmacy must refer to the special eligibility requirements necessary for service to be provided, consistent with the eligibility requirements as described in this Indian health addendum in paragraphs 5(a) for IHS providers and 5(b) for tribal and urban providers.
19. Hours of Service.
The hours of service of the pharmacies or dispensaries of Provider shall be established by Provider. At the request of the Part D Plan Sponsor, Provider shall provide written notification of its hours of service.
20. Endorsement
An endorsement of a non-Federal entity, event, product, service, or enterprise may be neither stated nor implied by the IHS provider or IHS employees in their official capacities and titles. Such agency names and positions may not be used to suggest official endorsement or preferential treatment of any non-Federal entity under this agreement.
21. Sovereign Immunity
Nothing in the Part D Plan Sponsor’s Agreement or in any addendum thereto shall constitute a waiver of federal or tribal sovereign immunity.
Signature of Authorized Representative Printed Name of Authorized Representative
Title of Authorized Representative
| File Type | application/msword |
| File Title | MEDICARE PRESCRIPTION DRUG BENEFIT |
| Author | Marla Rothouse |
| Last Modified By | CMS |
| File Modified | 2009-09-02 |
| File Created | 2009-08-21 |