CMS-10137 - Supporting Statement A [rev 10-22-2013 by OSORA PRA]

CMS-10137 - Supporting Statement A [rev 10-22-2013 by OSORA PRA].doc

Solicitation for Applications for Medicare Prescription Drug Plan 2015 Contracts

OMB: 0938-0936

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Supporting Statement

Applications for Solicitation for Applications for Medicare

Prescription Drug Plan 2015 Contracts

CMS-10137, OCN 0938-0936


BACKGROUND


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 section 1860D 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 (Part D). The MMA was amended on July 15, 2008 by the enactment of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), on March 23, 2010 by the enactment of the Patient Protection and Affordable Care Act and on March 30, 2010 by the enactment the Health Care and Education Reconciliation Act of 2010 (collectively the Affordable Care Act).


Coverage for the prescription drug benefit is provided through contracted prescription drug plans (PDPs) or through Medicare Advantage (MA) plans that offer integrated prescription drug and health care coverage (MA-PD plans). Cost Plans that are regulated under Section 1876 of the Social Security Act, and Employer Group Waiver Plans (EGWP) may also provide a Part D benefit. Organizations wishing to provide services under the Prescription Drug Benefit Program must complete an application, negotiate rates, and receive final approval from CMS. Existing Part D Sponsors may also expand their contracted service area by completing the Service Area Expansion (SAE) application.


A. JUSTIFICATION


1. Need and Legal Basis


Collection of this information is mandated in Part D of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) in Subpart 3. The application requirements are codified in Subpart K of 42 CFR 423 entitled Application Procedures and Contracts with PDP Sponsors.”


Effective January 1, 2006, the Part D program established an optional prescription drug benefit for individuals who are entitled to Medicare Part A or enrolled in Part B. In general, coverage for the prescription drug benefit is provided through PDPs that offer drug-only coverage, or through MA organizations that offer integrated prescription drug and health care coverage (MA-PD plans). PDPs must offer a basic drug benefit. Medicare Advantage Coordinated Care Plans (MA-CCPs) must offer either a basic benefit or may offer broader coverage for no additional cost. Medicare Advantage Private Fee for Service Plans (MA-PFFS) may choose to offer a Part D benefit. Cost Plans that are regulated under Section 1876 of the Social Security Act, and Employer Group Plans may also provide a Part D benefit. If any of the contracting organizations meet basic requirements, they may also offer supplemental benefits through enhanced alternative coverage for an additional premium.


Applicants may offer either a PDP or MA-PD plan with a service area covering the nation (i.e., offering a plan in every region) or covering a limited number of regions. MA-PD and Cost Plan applicants may offer local plans.


There are 34 PDP regions and 26 MA regions in which PDPs or regional MA-PDs may be offered respectively. The MMA requires that each region have at least two Medicare prescription drug plans from which to choose, and at least one of those must be a PDP.


Requirements for contracting with Part D Sponsors are defined in Part 423 of 42 C.F.R.


This clearance request is for the information collected to ensure applicant compliance with CMS requirements and to gather data used to support determination of contract awards.


2. Information Users


The information will be collected under the solicitation of proposals from PDP, MA-PD, Cost Plan, PACE, and EGWP applicants. The collected information will be used by CMS to: (1) ensure that applicants meet CMS requirements, (2) support the determination of contract awards.


Participation in the Part D program is voluntary in nature. Only organizations that are interested in participating in the program will respond to the solicitation. MA-PDs that voluntarily participate in the Part C program must submit a Part D application and successful bid.


3. Use of Information Technology


Applicants are asked to complete the application through CMS online Health Plan Management System (HPMS). This will entail clicking checkboxes, completing some minor text fields electronically, and uploading certain supporting documentation. Applicants are not asked to provide any documentation by CD or hardcopy.


Technology is used in the collection, processing and storage of the data used in the application and bidding process. The paperwork burden is offset by requesting electronic copies of the applicant submissions for review by specific CMS program areas. Specifically the Applicant must submit the entire application and supporting documentation electronically through HPMS.


4. Duplication of Efforts


This form does not duplicate any information currently collected. It contains information essential to the operation and implementation of the Medicare Prescription Drug Benefit program. It is the only standardized mechanism available to record data from organizations interested in contracting with CMS.


5. Small Businesses


The collection of information will have a minimal impact on small businesses or other small organizational entities since the applicants must possess an insurance license and be able to accept risk. Generally, state statutory licensure requirements effectively prevent small organizations from accepting the level of risk needed to provide the pharmacy benefits required in the Medicare Prescription Drug Benefit Program.


6. Less Frequent Collection


If this information is not collected CMS will have no mechanism to: (1) ensure that applicants meet CMS requirements, (2) to support determination of new or expanding contract awards. CMS is currently required by statute to provide an opportunity for organizations to apply for new or expanded contracts annually, so CMS cannot reduce the frequency of this collection.


7. Special Circumstances


Each applicant is required to enter and maintain data HPMS. Prompt entry and ongoing maintenance of these data in HPMS will facilitate the tracking of the applicant’s application throughout the review process. If the applicant is awarded a contract after negotiation, the collected information will be used for frequent communications. Applicants are expected to ensure the accuracy of the collected information on an ongoing basis.


8. Federal Register Notice/Outside Consultation


The final rule was published January 28, 2005. Below is a table that identifies each of the subsequent publications of regulations related to the Part D program.


Additional Part D Regulations Since 2006

Reference

Title

Date Published

CMS-4124-FC

Medicare Program; Revisions to the Medicare Advantage

and Part D Prescription Drug Contract Determinations, Appeals, and Intermediate Sanctions Processes

December 5, 2007

CMS-0016-F and

CMS-0018-F

Medicare Programs; Standards for E-Prescribing Under

Medicare Part D and Identification of Backward

Compatible Version of Adopted Standard for E-Prescribing and the Medicare Prescription Drug Program (Version 8.1)

April 7, 2008

CMS-4133-F

Medicare Program; Weighting Methodology Used to

Calculate the Low-Income Benchmark Amount

April 3, 2008,

corrected April

17, 2008

CMS-4130-F

Medicare Program; Policy and Technical Changes to the

Medicare Prescription Drug Benefit

April 15, 2008

CMS-4119-F

Medicare Program; Medicare Part D Claims Data

May 28, 2008

CMS-4138-IFC

Medicare Program; Revisions to the Medicare Advantage

and Prescription Drug Benefit Programs

September 18,

2008

CMS-4131-F

Medicare Program; Medicare Advantage and Prescription

Drug Benefit Programs: Final Marketing Provisions

September 18,

2008

CMS-4138-IFC2

Medicare Program; Revision to the Medicare Advantage

and Prescription Drug Benefit Programs: Clarification of

Compensation Plans

November 10,

2008

CMS-4131-FC

Medicare Program; Medicare Advantage and Prescription

Drug Benefit Programs: Negotiated Pricing and

Remaining Revisions

January 12, 2009

CMS-4138-IFC4

Medicare Programs; Medicare Advantage and Prescription

Drug Programs MIPPA Drug Formulary & Protected

Classes Policies

January 16, 2009

CMS-4085-F

Medicare Program; Policy and Technical Changes to the

Medicare Advantage and the Medicare Prescription Drug

Benefit Programs

April 15, 2010

CMS-4144-F

Medicare Program; Policy and Technical Changes to the

Medicare Advantage and the Medicare Prescription Drug

Benefit Programs

April 15, 2011


CMS-4157-FC

Medicare Program; Changes to the Medicare Advantage

and the Medicare Prescription Drug Benefit Programs for

Contract Year 2013 and Other Changes

April 12, 2012

CMS-4173-F

Medicare Program; Medical Loss Ratio Requirements for

the Medicare Advantage and Medicare Prescription Drug

Benefit Programs

May 23, 2013



Federal Register Notice

Volume & Page Number

Public Comments

Publication Date

78 FR 38986

60-Day FR notice. Comments received.

June 28, 2013


9. Payment/Gift To Respondent


There are no payments or gifts associated with this collection.


10. Confidentiality


Consistent with federal government and CMS policies, CMS will protect the confidentiality of the requested proprietary information. Specifically, only information within a submitted application (or attachments thereto) that constitutes a trade secret, privileged or confidential information, (as such terms are interpreted under the Freedom of Information Act and applicable case law), and is clearly labeled as such by the Applicant, and which includes an explanation of how it meets one of the exceptions specified in 45 CFR Part 5, will be protected from release by CMS under 5 U.S.C. § 552(b) (4). Information not labeled as trade secret, privileged, or confidential or not including an explanation of why it meets one of the FOIA exceptions in 45 CFR Part 5 will not be withheld from release under 5 U.S.C. § 552(b)(4).


11. Sensitive Questions


Other than the labeled information noted above in section 10, there are no sensitive questions included in the information request.


12. Burden Estimate (Total Hours & Wages) update


Tables 1 and 2 provide an estimate of the total hours and costs by activity related to the application processes. Our estimates include the review of application instructions, and completion of the application. The completion of the application encompasses completing attestations and uploading supporting documentation. Overall, the estimated hour burden for completion of the prescription drug applications is 2,319 hours. This is a 187 hour increase from the 2014 prescription drug application. Based on prior years’ experience CMS has determined that the estimated the number of 2015 applicants should be adjusted to properly reflect the increase in MAPD organizations

seeking to apply to contract with CMS. Specifically, CMS estimates that for 2015 there will be 5% more applications received, and the majority of those received will be expansions of existing contracts, which require 60% fewer hours to complete (see Section 15 for further detail). The estimated wage burden for the Prescription Drug Applications is $127,565 and estimates of overall wages were calculated by assuming a $55.00 per hour wage rate. CMS kept the hour wage rate constant from 2014 calculations.


The overall paperwork burden is increased for PDP, MA-PD, Cost Plan, PACE, EGWP Plan, and SAE applicants because of the increase in the estimated number of applicants. The burden per applicant has not changed.


Table 1

Summary of Hour Burden by Type of Applicant and Process


Hours Estimate


Activity


PDP


MA-PD


Cost Plans


PACE


Direct

EGWP

800 Series

Only

EGWP


SAE


Total

Hours

Review of

Instructions

26

175

1

3

1

4

336

546

Complete

Application


80


546


9


25


12


26


1,076


1,773

Total All

103

570

10

28

14

32

1,376

2,319



Table 2

Summary of Wage Burden by Type of Applicant and Process


Wages Estimate

Activity

PDP

MA-PD

Cost Plans

PACE

Direct

EGWP

800 Series Only EGWP

SAE

Total Wages

Review of

Instructions

$1,430

$ 9,625

$55

$165

$55

$220

$18,480

$30,030

Complete

Application

$4,376

$30,051

$501

$1,368

$655

$1,405

$59,179

$97,535

Total All

$5,806

$39,676

$556

$1,533

$710

$1,625

$77,659

$127,565


Table 3

Summary of Burden Hours per Application by Type of Application


Type of Part D Application

2014 Estimates

(rounded to nearest quarter hour)

2015 Estimates

(rounded to nearest quarter hour)

PDP

13.00

13.00

MA-PD

10.25

10.25

Cost Plan

10.25

10.25

PACE

10.00

10.00

Direct EGWP

14.25

14.25

800 Series Only EGWP

14.25

14.25

SAE

8.75

8.75


13. Capital Costs (Maintenance of Capital Costs)


We do not anticipate that additional capital costs are incurred. CMS requirements do not require the acquisition of new systems or the development of new technology to complete the application. CMS anticipates that all qualified applicants maintain systems for maintenance of their pharmacy network contracts, pharmacy benefits, and financial records.


System requirements for submitting HPMS applicant information are minimal. PDPs will need the following to access HPMS: (1) Internet or Medicare Data Communications Network (MDCN) connectivity, (2) use of a Microsoft Internet Explorer web browser (version 5.1 or higher) with 128- bit encryption, and (3) a CMS-issued user ID and password with access rights to HPMS for each user within the PDP organization who will require such access. CMS anticipates that all qualified applicants meet these systems requirements and will not incur additional capital costs.


14. Cost to Federal Government


The estimated cost for preparation, review, and evaluation of the prescription drug applications is approximately $140,000.00. This estimated cost is based on the budgeted amount for application review and support and is inclusive of wages, operational expenses (equipment, overhead, and support staff), and other expenses incurred in the application effort. Due to increased efficiencies in the application review process, the cost to the Federal Government remains unchanged from 2013.


15. Changes to Burden


The 9% increase in total burden represents an increase in the total number of MAPD applications (from 241 to 254) expected in 2015 compared to the 2014 estimates.


The application has been revised by adding clarifying language and by revising a definition. There has been no change in the estimated burden per applicant.


The burden hours represent the time it takes for an applicant to complete the Part D solicitation and not the time that applicants spend drafting and negotiating contracts with downstream and related entities to perform key Part D functions on their behalf.


16. Publication and Tabulation Dates


This information is not published or tabulated.


17. Expiration Date


This collection of information applies to contract years 2015-2017.


18. Certification Statement


There are no exceptions to the certification statement.


B. COLLECTION OF INFORMATION EMPLOYING STATISTICAL METHODS


There have been no statistical methods employed in this collection.

Attachment 1



Summary of Medicare Part D Regulatory Requirements Waived for

Medicare Advantage Prescription Drug (MA-PD) Applicants

Part D Regulation

Regulatory Requirement(s) Description

Basis for Waiver

42 CFR 423 Subpart I,

excepting 42 CFR

§423.440 (which concerns Federal preemption of State law and prohibition of State premium taxes)

Licensure and Solvency Applicant must be

licensed to bear risk in the State in which it intends to operate or apply for a licensure

waiver and meet CMS solvency standards.

Duplicative of MA Organization requirements

for licensure and solvency under 42 CFR

§422.6 (i); 42 CFR §422.400; and 42 CFR

§422.501).

42 CFR §423.153(b)

&(d)

Waiver applies to MA- PFFS only

Utilization Management Applicant must

have a cost effective utilization management system.

Waiver stated in regulations at 42 CFR

§423.153 (e) excuses MA PFFS organizations from meeting the utilization management requirements specified in 42 CFR §423.153 (b).


42 CFR §423.153(b)

&(d)

Waiver applies to MA- PFFS only

Medication Therapy Management Program

Applicant must have a program to manage medication therapy to optimize outcomes,

reduce adverse drug interactions.

Waiver stated in regulations at 42 CFR

§423.153 (e) excuses MA PFFS organizations from meeting Medication Therapy Management

Program requirements specified in 42 CFR

§423.155.


42 CFR §423.112 (a)

Service Area Applicant must offer a Part D

plan that serves at least an entire PDP region.

Conflicts with MA regulations (42 CFR §422.2)

that allow MA organizations to offer local MA plans (i.e., plans that serve less than an entire state).


42 CFR §423.120 (a)(7)(i)

Waiver applies only to MA-PDs that operate their own pharmacies

Pharmacy Network Applicant must offer its

Part D plan benefit through a contracted retail pharmacy network that meets CMS convenient

access standards.

Waiver stated in regulations at 42 CFR

§423.120(a)(7) (i) excuses from the CMS

convenient access standards those MA organizations that administer their Part D benefit through pharmacies owned by the MA organization if that organization’s pharmacy network access is comparable to the CMS convenient access standards .



42 CFR

§423.120(a)(7)(ii) Waiver applies to MA- PFFS plan that provides access through all pharmacies.

Pharmacy Network Applicant must offer its

Part D plan benefit through a contracted retail pharmacy network that meets CMS convenient

access standards

Waiver stated in regulations at 42 CFR

§423.120 (a) (7) (ii) excuses from the CMS

convenient access standards those MA-PFFS

organizations that offer a qualified prescription drug coverage, and provide plan enrollees with access to covered Part D drugs dispensed at all pharmacies, without regard to whether they are contracted network pharmacies and without charging cost-sharing in excess of the requirements for qualified prescription drug coverage.

42 CFR

§423.120(a)(8)(i)

Waiver applies only to MA-PDs that operate their own pharmacies

Pharmacy Network Applicant must offer its

Part D benefit through any willing pharmacy that agrees to meet reasonable and relevant

standard network terms and conditions.

Waiver promotes the coordination of Parts C

and D benefits. Excuses from CMS any willing pharmacy requirement those MA organizations

that administer their Part D benefit through pharmacies owned by the MA organization and dispense at least 98% of all prescriptions through pharmacies owned and operated by

Applicant.


42CFR §423.34

42 CFR §423.36

42 CFR §423.38

42 CFR §423.42

Enrollment and Eligibility Applicant agrees

to accept Part D plan enrollments and determine Part D plan eligibility consistent

with Part D program requirements.

Duplicative of MA requirements under 42 CFR

422 Subpart B - Eligibility, Election, and

Enrollment. MA organizations will conduct enrollment and determine eligibility consistent

with MA program requirements. These


Part D Regulation

Regulatory Requirement(s) Description

Basis for Waiver

42 CFR §423.44


requirements mirror those stated in the Part D

regulation.


42 CFR §423.514(b)

and (c)

Reporting Requirements Applicant must

report information concerning significant business transactions.

Duplicative of MA requirements for reporting

significant transactions under 42 CFR §422.500 and 42 CFR §422.516(b) and (c) and requirements for providing annual financial statements.

42 CFR §423.514(e)

Reporting Requirements Applicant must

notify CMS of any loans or any other special arrangements it makes with contractors, subcontractors, and related entities.

Duplicative of MA requirement for reporting

loans or special arrangements under 42 CFR

§422.516(e).

42 CFR §423.512

Experience and Capabilities Applicant must

reach the minimum enrollment standard within the first year it offers a Part D benefit.

Conflicts with MA regulation that permits three

years to achieve the minimum enrollment level.


Summary of PDP Application Requirements Fulfilled under Part C for

Cost Plan Prescription Drug Applicants

Part D Regulation

Waived

Regulatory Requirement(s) Description

Basis and Rationale

42 CFR 423 Subpart I,

excepting 42 CFR

§423.440 ( which concerns Federal

preemption of State law

and prohibition of State premium taxes)

Licensure and Solvency Applicant must be

licensed to bear risk in the State in which it intends to operate or apply for a licensure waiver

and meet CMS solvency standards.

Duplicative of Cost Plan requirements for licensure

and solvency under 42 CFR §417.404 (General requirements) and 42 CFR §417.407 (Requirements

for a Competitive Medical Plan (CMP)). All Cost Plans are State licensed in some manner or have authority to offer a Cost Plan in all states in which they operate.

42 CFR §423.112 (a)

Service Area – Applicant must offer a Part D

plan that serves at least an entire PDP region.

Conflicts with Cost Plan regulations (42 CFR §417.1)

defining the service area for HMOs and CMPs offering Medicare reasonable Cost Plans.

42 CFR §423.120(a)(3)

Waiver applies only to Cost contractors that operate their own

pharmacies

Pharmacy Network Applicant must offer its

Part D plan benefit through a contracted retail pharmacy network that meets CMS standards for convenient access.

Waiver stated in regulations at 42 CFR

§423.120(a)(7)(i) excuses from the CMS standards for convenient access those Cost contractors that administer their Part D benefit through pharmacies

owned by the Cost contractor if that organization’s pharmacy network access is comparable to the CMS convenient access standards . {Note: Applicants will be expected to provide comparable information in the

application for organizational pharmacies}

42 CFR §423.120(a)(8)(i)

Waiver applies only to

Cost contractors that operate their own pharmacies

Pharmacy Network Applicant must offer its

Part D benefit through any willing pharmacy that agrees to meet reasonable and relevant standard

network terms and conditions.

Waiver promotes the coordination of Parts C and D

benefits. Excuses from CMS any willing pharmacy requirement those Cost contractors that administer

their Part D benefit through pharmacies owned by the

Cost contractor and dispense at least 98% of all prescriptions through pharmacies owned and operated

by Applicant.


Summary of Part D Application Requirements Waived or Modified for

Employer/Union-Only Group Waiver Plan (EGWP) Applicants


Part D Regulation

Type of EGWP Applicant

Waiver or Modification

Applies To

Application

Requirement(s) Description

Waiver/Modification

42 CFR §423.104(b)

Direct Contract PDP

Direct Contract MA-PD


800 SeriesPDP 800 SeriesMAO 800 Series” Cost PD

Enrollment: Applicant will

permit the enrollment of all

Medicare beneficiaries that reside in the service area.

The requirement to enroll all

beneficiaries residing in service area is waived for all EGWP

applicants. Enrollment in these

plans is restricted to the

employer/union plan sponsor’s

retirees.

42 CFR

§423.120(a)(1)

Direct Contract PDP

Direct Contract MA-PD


800 SeriesPDP 800 SeriesMAO 800 Series” Cost PD

Retail Pharmacy Access:

Applicant agrees to meet the

TRICARE” retail pharmacy

access standards defined in

42 CFR §423.120(a).

EGWP applicants are required to

submit retail pharmacy access for review in the same manner as

individual plans but are not held

to the same TRICARE”

measurement standards as individual plans. EGWPs are

required to attest that their retail

networks are sufficient to meet

the needs of its retiree population, and that CMS reserves the right to

review the adequacy of the networks and potentially require expanded access.

42 CFR §423.50(a)

Direct Contract PDP

Direct Contract MA-PD


800 SeriesPDP 800 SeriesMAO 800 Series Cost PD

Prior Review and Approval

of Dissemination Materials: Applicant must submit all marketing/dissemination

materials for CMS prior review and approval.

EGWP applicants are waived

from the requirement for prior review and approval requirements of beneficiary dissemination

materials. EGWPs must provide informational copies of dissemination materials to CMS at time of use in accordance with

the specific requirements that apply to these applicants.

42 CFR §423.128;

Medicare Marketing

Guidelines

Direct Contract PDP

Direct Contract MA-PD


800 SeriesPDP 800 SeriesMAO 800 Series” Cost PD

Timing of Certain

Dissemination Materials: Annual Notice of Change

(ANOC) Summary of

Benefits (SB), and

Formulary Materials must be mailed to beneficiaries by October 31st of each year (15 days before annual coordinated election period).

These rules have been modified

for all EGWP applicants when the employer or union sponsor has an

open enrollment period that does

not correspond with Medicare’s annual open coordinated election period. In these cases, the materials must be sent at least 15 days before the beginning of the employer or union sponsor’s annual open enrollment period.


Part D Regulation

Type of EGWP Applicant

Waiver or Modification

Applies To

Application

Requirement(s) Description

Waiver/Modification

42 CFR

§423.128(d)(2)

800 SeriesPDP

800 SeriesMAO 800 Series” Cost PD

Internet Website: Applicants

are required to provide specific Information via an

Internet website.

The requirement to post 800

Seriesplan information on the

Applicant’s internet plan website has been waived. These plans are not open to general enrollment

and the posting of this

information usually takes place on a separate website or on a website provided by the employer or

union group plan sponsor.

42 CFR §423.48

Direct Contract PDP

Direct Contract MA-PD


800 SeriesPDP 800 SeriesMAO 800 Series” Cost PD

CMS Reporting

Requirements Re: Information About Part D: Applicants are required to submit certain information to CMS such as pricing and pharmacy network information to be publicly reported to beneficiaries on www.medicare.gov to make informed enrollment decisions.

These requirements have been

waived for all EGWPs. These plans are not open to general enrollment and thus this information would be inapplicable and confusing to Medicare beneficiaries.

42 CFR §423.265

Direct Contract PDP

Direct Contract MA-PD


800 SeriesPDP 800 SeriesMAO 800 Series” Cost PD

Part D Bid Submission: All

applicants are required to submit a Part D bid and to receive approval from CMS

for the bid.

The requirement to submit a Part

D bid (i.e., Bid Pricing Tool) has been waived for all Part D EGWPs beginning in 2008.

42 CFR

§423.272(b)(3)(i)

Direct Contract PDP

Direct Contract MA-PD


800 SeriesPDP 800 SeriesMAO 800 Series” Cost PD

Meaningful Differences: All

Applicants are required to submit plan offerings that represent meaningful

differences to beneficiaries with respect to benefit packages and plan cost structures.

The requirement to have

meaningful differences in plan offerings by the sponsor in the service area has been waived for

all EGWPs.

42 CFR §423.293(a)

Direct Contract PDP

Direct Contract MA-PD


800 SeriesPDP 800 SeriesMAO 800 Series” Cost PD

Premium Withholding

Requirements: All applicants are required to

allow beneficiaries to request premium withholding from their Social Security check.

The requirement to offer premium

withholding to beneficiaries has been waived for all EGWPs. This

option is not available to any

EGWP enrollees.

42 CFR §423.34

Direct Contract PDP

Direct Contract MA-PD


800 SeriesPDP 800 SeriesMAO 800 Series” Cost PD

Auto and Facilitated

Enrollment Requirements: Part D applicants must accept auto and facilitated

enrollments.

These requirements are waived

for all EGWPs. These plans do not receive auto or facilitated enrollments.


Part D Regulation

Type of EGWP Applicant

Waiver or Modification

Applies To

Application

Requirement(s) Description

Waiver/Modification

Medicare Marketing

Guidelines

Direct Contract PDP

Direct Contract MA-PD


800 SeriesPDP 800 SeriesMAO 800 Series” Cost PD

Part D Beneficiary Customer

Service Call Center

Requirements: Applicants are required to comply with certain beneficiary customer service call center hour and performance requirements.

These service call center hours

and performance requirements are waived for all EGWP applicants.

EGWPs must provide beneficiary

customer call center services during normal business hours.

CMS may require expanded call center hours in the event of beneficiary complaints or for other reasons to ensure hours are sufficient to meet the needs of

beneficiaries.

42 CFR

§423.401(a)(1);

§423.504(b)(2);

§422.400(a);

§422.503(b)(2)

Direct Contract PDP

Direct Contract MA-PD

Licensure and Financial

Solvency: Applicant must be licensed under State law as a

risk bearing entity eligible to

offer health benefits coverage in each State in

which the benefits are offered.

Direct Contract EGWPs are not

required to be licensed as they are providing benefits solely to their

retirees. However, in exchange

for the waiver of licensing requirements, Direct Contract

EGWPs are required to meet certain ongoing Part C and/or Part D financial solvency and capital adequacy requirements. These

requirements demonstrate that the entity’s 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.

42 CFR

§423.504(b)(4)(i)-(iii)

Direct Contract PDP

Direct Contract MA-PD

Administrative and

Management Requirements: Applicant must comply with certain administrative and management requirements.

These requirements have been

waived for all Direct Contract EGWPs that meet certain requirements. A waiver applies when the Applicant is subject to other administrative and management requirements such as ERISA fiduciary standards or other similar state or federal standards.

42 CFR §423.514(a)

Direct Contract PDP

Direct Contract MA-PD

Reporting Requirements to

the Public and Enrollees: Applicants are required to report certain information to CMS, to the public and to enrollees (such as the cost of their operations or financial statements).

This requirement to report to the

public and enrollees is waived for Direct Contract EGWPs under certain circumstances. To avoid imposing additional and possible conflicting public disclosure obligations, CMS modified these reporting requirements for Direct EGWPs to allow information to

be reported to enrollees and to the general public to the extent

required by other law (e.g., ERISA or securities laws) or by contract.


Part D Regulation

Type of EGWP Applicant

Waiver or Modification

Applies To

Application

Requirement(s) Description

Waiver/Modification

42 CFR §423.4

Direct Contract PDP

Non-Governmental Entity

Requirement: Governmental entities are not permitted to

be PDP Sponsors

This prohibition is waived for

Direct Contract PDPs so that governmental entities (state and

local governments and

municipalities) may apply to sponsor a PDP for their retirees.




PART D WAIVERS

Summary of PDP Application Requirements Waived for

PACE Prescription Drug Applicants

CMS is authorized to grant waivers of Part D program requirements where such a requirement conflicts with or duplicates a PACE requirement, or where granting such a waiver would improve the PACE Organizations coordination of PACE and Part D benefits. The following waivers are in effect for all PACE organizations.


Summary of Medicare Part D Regulatory Requirements Waived for PACE Organizations


Part D Regulation

Regulatory Requirement(s)

Description

42 CFR §423.44

Involuntary disenrollment

42 CFR §423.48

Information about Part D

42 CFR §423.50

Approval of marketing materials and enrollment forms

42 CFR §423.104(g)(1)

Access to negotiated prices

42 CFR §423.112

Establishment of PDP service areas

42 CFR §423.120(a)

Access to covered Part D drugs

42 CFR §423.120(c)

Use of standardized technology

42 CFR §423.124

Out-of-network access to covered Part D drugs at out-of-network pharmacies

42 CFR §423.128

Dissemination of Part D plan information

42 CFR §423.132

Public disclosure of pharmaceutical prices for equivalent drugs

42 CFR §423.136

Privacy, confidentiality, and accuracy of enrollee records

42 CFR §423.153(a)- 42 CFR

§423.153(d)

Drug utilization management, quality assurance, and medication therapy

management programs (MTMPs)

42 CFR §423.156

Consumer satisfaction surveys

42 CFR §423.159(c), 42 CFR §423.160(a)

Electronic prescribing

42 CFR §423.162

Quality Improvement organization activities

42 CFR §423.265(b)

Note: Automatic waiver applies to new or potential organizations that are not operational by the June deadline.


Those organizations with effective program agreements must submit a Part D waiver request in the event they are unable to meet the June deadline.

Part D bid submission deadline

42 CFR §423.401(a)(1)

Licensure

42 CFR §423.420

Solvency standards for non-licensed entities

42 CFR §423.462

Medicare secondary payer procedures

42 CFR §423.464(c)

Coordination of benefits and user fees

42 CFR §423.464(f)(2) and 42 CFR

§423.464(f)(4)

Coordination with other prescription drug coverage

42 CFR §423.502(b)(1)(i-ii)

Documentation of State licensure or Federal waiver

42 CFR §423.504(b)(2-3), 42 CFR

§423.504(b)(4)(i-v) and (vi)(A-E), and

42 CFR §423.504(d)

Note: Organizations are required to abide by 42 CFR §423.504(b)(4)(vi)(F- H), 42 CFR §423.504(b)(5), 42 CFR

§423.504(c), and 42 CFR §423.504(e)

Conditions necessary to contract as a Part D plan sponsor


Part D Regulation

Regulatory Requirement(s)

Description

42 CFR §423.505(a-c) and 42 CFR

§423.505(e-i)

Note: Organizations are required to abide by 42 CFR §423.505(dand j)

Contract provisions

42 CFR §423.505(k)(6)

Note: Organizations are required to abide by 42 CFR §423.505(k)(1-5)

Certification for purposes of price compare

42 CFR §423.506(a)-(b)

Note: Organizations are required to abide by 423.506(c)-(e)

Effective date and term of contract

42 CFR §423.512 42 CFR §423.514

Contracting terms

42 CFR §423.551-42 CFR §423.552

Change of ownership or leasing of facilities during term of contract

42 CFR §423.560-42 CFR §423.638

Grievances, coverage determinations, and appeals

N/A

A PDP sponsor is required to be a nongovernmental entity

Summary of Part D Application Requirements Needed for

All Service Area Expansion Applicants

Note: SAE Applicants are currently under contract with CMS for the Part D benefit. CMS is only requesting the

sections identified below for the service area not under contract with CMS for 2011. The remaining application sections are reviewed through the contract renewal process.

Application Section

Rationale

Contract Number

SAE will be expanding regions covered under an existing CMS contract number.

Service Area

Provided to identify the new service area/region that Part D sponsor is seeking to cover.

Licensure and Solvency

For those Part D sponsors operating a PDP, state licensure and solvency requirements

will need to be met for the new service area/region.

Pharmacy Access

Part D sponsors will need to meet the pharmacy access requirements for the new service

area/region.

Certification

Part D sponsors will need to have an authorized representative submit a signed

certification to ensure that submission meets CMS requirements.



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File Typeapplication/msword
AuthorCMS
Last Modified ByMitch Bryman
File Modified2013-10-29
File Created2013-10-22

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