Under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), and implementing regulations at 42 CFR, Medicare Advantage organizations (MAO) and Prescription Drug Plans (PDP) are required to submit an actuarial pricing bid for each plan offered to Medicare beneficiaries for approval by the Centers for Medicare and Medicaid Services. MAOs and PDPs use the Bid Pricing Tool software to develop their actuarial pricing bid. The information provided in the BPT is the basis for the plan's enrollee premiums and CMS payments for each contract year.
Justification for Emergency PRA Clearance of Bid Pricing Tool
After the CY2007 bid submission and review season drew to a close in September 2006, CMS received industry feedback and suggestions for improvements that may improve the usability of the BPT. Since CMS strives to improve the data collection tools to minimize the filing burden on the plans and to maximize the output of the tools for CMS use, CMS hosted an online comment session to solicit feedback from industry. CMS hosted the session during non-peak months for the bidders to ensure that industry users had an opportunity to provide comments and suggest enhancements for the following year. CMS gave careful consideration to the feedback that was submitted, and incorporated many of the suggestions. For example, the BPT was changed to allow more flexibility for users in printing various BPT worksheets.
There were several potential policy changes and MA/PD program changes that would be effective in CY2008 that needed consideration by CMS for their impact on the BPT. For example, the Tax Relief and Health Care Act of 2006 was enacted in December 2006 that necessitated a change to the BPT regarding the regional PPO stabilization fund.
Given the life cycle of the BPT illustrated above, CMS does not have sufficient time to complete the normal PRA clearance process and ensure that organizations have sufficient time to complete and submit their BPTs by the statutory deadline of June 4, 2007. The normal PRA clearance process would result in violating this statutory deadline which would prevent MA and PDP organizations from providing benefits to millions of Medicare beneficiaries.
This could result in public harm, as the Medicare Advantage and Prescription Drug Programs depend on the annual bidding process and timeline described in this document. If the bidding process/timeline were delayed for normal PRA clearance, these programs would not be operational for millions of Medicare beneficiaries.
Due to the nature of the annual bidding cycle, the BPT requires the emergency PRA clearance process.
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
CMS-1042 Attachment C, CY2008 BPT Changes 2-2-07.doc
Bid Pricing Tool (BPT) for Medicare Advantage (MA) Plans and Prescription Drug Plans (PDP): CY 2008