Retiree Drug Subsidy (RDS) Payment Request and Instructions (CMS-10170)

OMB Approval # 0938-0977

R DS

Retiree Drug Subsidy

Payment Instructions

CENTERS FOR MEDICARE & MEDICAID SERVICES

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-NEW.0977. The time required to complete this information collection is estimated to average 37151 hours per response, including the time to review instructions, search existing data resources, gather the data needed, and complete and review the information collection. If you have comments concerning the accuracy of the time estimate(s) or suggestions for improving this form, please write to: CMS, 7500 Security Boulevard, Attn: PRA Reports Clearance Officer, Mail Stop C4-26-05, Baltimore, Maryland 21244-1850.

RDS Payment Instructions

Overview

The Medicare Retiree Drug Subsidy (RDS) program represents a particularly important strengthening of health care coverage for certain Medicare-eligible retirees. RDS is designed to encourage group health Plan Sponsors such as employers and unions to continue providing high quality prescription drug coverage. It has highly flexible rules that permit employers and unionssponsors to continue providing drug coverage to their Medicare-eligible retirees at a lower cost while retaining their current plan designs that are at least equivalent to the value of the Medicare defined standard Part D drug benefit. The retiree drug subsidy will pay 28 percent of the retiree’s drug costs (as defined by the regulation) between $250the applicable cost threshold and cost limit and $5000 in 2006 and are is exempt from federal taxation. To qualify for the subsidy, the plan sponsorPlan Sponsor must show that its coverage is as generous as, or more generous than, defined standard coverage under the new Medicare prescription drug benefit. The final regulation includes a two-part test for plan sponsors to Plan Sponsors to determine whether this standard, referred to as “actuarial equivalence,” has been met. The subsidy only applies to retirees eligible for but not enrolled in a Part D plan and who are covered under a qualified retiree prescription drug plan.

General Instructions for Submitting the RDS Payment Request

The RDS payment process has been designed by the Centers for Medicare & Medicaid Services (CMS) to assist in the efficient administration of the RDS program in compliance with federal regulatory requirements at 42 CFR §423 Subpart R. The RDS Program will be administered in a paperless environment via the secure RDS website.

Cost data, even aggregated for interim payment, may be considered Protected Health Information (PHI), and therefore, persons reporting and viewing the cost data and payment requests must be authorized to see PHI. Web Site.

The Plan Sponsor elects a payment frequency when completing the RDS application. There are four choices for payment frequency: monthly, quarterly, interim annual, and annual. For monthly, quarterly or interim annual payments, the Plan Sponsor will may submit cost data and receive a maximum of 12, 4, or one interim payment(s) for that period), respectively, based on the payment frequency elected. Within 15 months of the end of the plan year, the Plan Sponsor will must submit final cost data during reconciliation.

if it has received any interim payments, or if it has not, but wishes to receive subsidy. If a Plan Sponsor elects the annual payment option, the Plan Sponsor will submit all cost data duringwithin the deadline for submitting reconciliation period (within 15 months following the end of the plan year) and will receive a single payment.

The following data elements will be collected for interim payments:

• Application ID, Unique Benefit Option Identifier

• Vendor ID, or Plan Sponsor ID

• Submitter Type (Plan Sponsor or Vendor)

• Date and Time of file creation

• Year and Month of gross retiree cost incurred and paid

• Gross Retiree Cost, Threshold Reduction, and Cost Limit Reductions . Alternatively, an Estimated Premium Cost can be submitted for a fully insured plan

• Estimated Cost Adjustment

For each qualified covered retiree, the following data elements will be collected for the annual payment and final reconciliation payment:

• Application ID, Unique Benefit Option Identifier

• Date and Time of file creation

• Year and Month of gross retiree cost incurred

• SSN and/or HICN

• Full Name

• Date of Birth

• Gender

• Amount of Gross Retiree Cost

• Threshold Reduction

• Limit Reduction

• Actual Cost Adjustment

• Terms:

• Gross retiree costs: Gross retiree costs means for a qualifying covered retiree who is enrolled in a qualified retiree prescription drug plan during a plan year, non-administrative costs incurred under the plan for Part D drugs during the year, whether paid for by the plan or the retiree, including costs directly related to the dispensing of Part D drugs. [42 CFR 423.882]

• Costs incurred: Prescription costs are “incurred” when the prescription is filled by the pharmacy.

• Electronic signature: An electronic signature is provided by checking the “I agree” box and answering both of the security questions that were selected when creating a RDS secure website logon.

• Limit Reduction, Threshold Reduction, Premium Cost, Estimated Cost Adjustment and Actual Cost Adjustment are defined in Part II A.

Roles in the payment process:

Cost Reporter: The first step in the payment process, whether for interim payments, a one-time final payment, or for reconciliation, is to report cost data. The Cost Reporter reports those costs.that data. All costs cost data must be reported in aggregate by benefit option and plan month. This role may be filled by any of the following: the Authorized Representativea Vendor, the Account Manager, or a Designee that has been given cost reporting privileges for one or more benefit option(s). (The Plan Sponsor can assign one Cost Reporter to all benefit options or assign different Cost Reporters for one or more benefit options.) A Cost Reporter must be assigned to each Benefit Option. If a Vendor or Designee is not specified as the Cost Reporter for a benefit option, the Account Manager or Authorized Representative will must be responsible for reporting assigned as the costs for that benefit option. For reconciliation, Cost Reporters will report cost data for each qualifying covered retiree at the benefit option level. . CMS will enforce separation of duties with regard to cost reporting and payment requests; therefore, an individual cannot fulfill both the role of Cost Reporter and Payment Requester on a single application. If an Account Manager or a Designee is assigned as a Cost Reporter for a benefit option, they cannot fulfill the role of Payment Requester on the application. After costscost data have been reported for the benefit option(s) within aan RDS application, the data are totaled by the RDS CenterCMS for the payment request.

Payment RequestorRequester: The Payment RequestorRequester is responsible for reviewing costscost data that have been reported for the benefit option(s), selecting the benefit option(s) for which payment will be requested, and submitting the payment request to the RDS Center.CMS. The Payment RequestorRequester role for interim payments may be filled by any of the following: the Authorized Representative, the Account Manager, or a Designee that has been granted Payment Requestor privileges. There can be only one Payment Requester for an application. Only the Authorized Representative may submit a final annual payment or final reconciliation payment request.

Overview of Interim Payment Process:

The following is an overview of the interim payment process (monthly, quarterly, interim annual)

1. On the secure RDS Center websiteSecure Web Site at http://rds.cms.hhs.gov, the Account Manager, or the Authorized Representative or the Cost Reporter must specify how costs cost data will be reported for each benefit option. Costs Cost data may be reported by the following methods: data entry on the secure websiteSecure Web Site, file upload on the secure websiteSecure Web Site, or transmission to the CMS’ RDS Center mainframe. The methods do not have to be the same for all benefit options.

2. The Cost Reporter must aggregate the required data based on claims experience actual costs or the estimated premium cost to be claimed for qualified covered retirees. (See 42 CFR 423.888(b)(5) for the special rule allowing the use of estimated premium costs in determining interim payments for fully insured plansbenefit options.) Then, the Cost Reporter may sign on to the secure RDS Center websiteSecure Web Site and submit the required data on the cost reporting page. Alternatively, the Cost Reporter may transmit the cost data file to the RDS Center mainframe. In the future, the Cost Reporter may be able to upload the cost data file to the RDS Center website.Secure Web Site.

3. All Payment Requestors will be notified electronically when cost data reports are received by the RDS Center.

4. The Payment RequestorRequester must then review the cost data submitted. If there are different costs data reported for different benefit options, the Payment Requestor may accept some or all the cost reports submitted for the various benefit options. The Payment RequestorRequester may exclude one or more of the cost reports of the various benefit optionoptions from the payment request if it is believed there was an error in the data reported. Costs Cost data excluded from a payment request may be submitted on a future payment request. For example, if no cost report is submitted for a particular benefit option, that cost data will be eligible for inclusion in the next payment request. This gives the Payment Requestor the flexibility to wait for all benefit option cost reports to be submitted or elect to request payment for only some of the benefit options cost reports and include the excluded cost reports in a subsequent payment request.

5. After the Payment RequestorRequester has identified the cost data to be included in the payment request, the RDS CenterCMS will create a payment request summary, which must be reviewed by the Payment Requestor.Requester.

6. After review of the payment request summary and the decision to submit a payment request is made, the Payment RequestorRequester will accept the terms of the payment request agreement, provide his/ or her electronic signature and submit the payment request.

7. The payment request will be processed by the RDS CenterCMS.

8. If money is due to the Plan Sponsor, CMS will deposit any monies owed using an Electronic Funds Transfer (EFTAutomated Clearing House (ACH) transaction will deposit money into the bank account identifiedspecified by the Plan Sponsor on the application. A payment advice will be sent to the all individuals authorized as Payment RequestorsAn E-mail notifying the Plan Sponsor of payment will be sent to the Account Manager and Authorized Representative.

9. If a self-reported adjustment of cost data included in a prior payment submission results in the amount due to the Plan Sponsor to be less than zero, the Department of Health and Human Services overpayment rules at 45 CFR Part 30, Subpart B will apply.the next payment request submitted on any of the Plan Sponsor’s applications will be adjusted for the difference.

Overview of Reconciliation Process

All Plan Sponsors Reconciliation is the process by which a Plan Sponsor that had received any interim payment must submit reconciliation file(s) within 15 months followingto CMS, after the end of the plan year. For Plan Sponsors who elected an annual payment, all , the total gross covered retiree plan-related prescription drug cost data will be reported at reconciliation. Cost Reporter(s) must report in the reconciliation file(s) the and actual cost data, by month,adjustments for each benefit option at the retiree level for the plan year. Once all benefit options have been reported, the Payment Requestor must initiate, approve, and submit the reconciliation data. Reconciliation data will contain protected health information (PHI); therefore persons viewing reconciliation data must be authorized to see PHI.the application. The sum of the interim payments is compared with the final subsidy payment determination for the application. If the sum of the actual allowable retiree costs (ARC) attributable to gross costs between cost threshold and cost limit, submitted with the reconciliation payment request, was less than the sum of ARC attributable to such costs, submitted with the interim payment request(s); then, the amount of retiree drug subsidies received from the interim payments was greater than what should have been received. This constitutes an overpayment. CMS will initiate immediate overpayment recovery action.

1. For each benefit option, the reconciliation data can be uploaded to the RDS Center website, or sent to the RDS Center mainframe. If the file is being uploaded to the RDS Center website, the Cost Reporter will sign-on to the secure RDS Center website at http://rds.cms.hhs.gov and the reconciliation file will be uploaded.

2. The Payment Requestor will be notified electronically as the reconciliation data for each benefit option is received.

3. The Payment Requestor will review each reconciliation file transmitted to the RDS Center.

4. The Payment Requestor will submit the final reconciliation request on the secure RDS Center website.

5. The reconciliation request will be processed by the RDS Center.

6. If the amount due to the Plan Sponsor is greater than zero, an EFT transaction will deposit money into the bank account supplied by the Plan Sponsor on the application. A payment advice will be sent to all individuals authorized as Payment Requestors.

7. If the Plan Sponsor owes funds to the RDS Center, the Department of Health and Human Services overpayment rules at 45 CFR Part 30, Subpart B will apply.

Plan Sponsors that chose an annual RDS payment frequency, or otherwise did not receive any interim payments, and that wish to receive a subsidy, must use the reconciliation process to submit final cost reports and submit their one and only subsidy payment request. This request must be supported by data reflecting, among other data, the total gross covered retiree plan-related prescription drug costs, and actual cost adjustments for the application

1. Retiree files may be submitted to ensure that the retiree list reflects the most current data regarding qualifying covered retirees.

2. Plan Sponsors must coordinate individual retiree cost data within an application for the purpose of appropriately applying each individual retiree's cost threshold and cost limit.  

3. The Cost Reporter must aggregate the required cost data based on claims experience and not estimated premium costs. All actual cost adjustments (e.g., discounts, chargebacks, rebates, and similar price concessions) for the final cost data reported must be calculated. Final cost data will be reported by the same methods as described under the Overview of Interim Payment Process.

4. The Plan Sponsor must complete all steps described in Section D: Reconciliation and Single Annual Payment on the RDS Secure Web Site.

5. The Authorized Representative will submit the final payment or reconciliation request using the RDS Secure Web Site.

6. The final payment or reconciliation request will be processed by CMS.

7. If the amount due to the Plan Sponsor is greater than zero, CMS will deposit any monies owed using an Automated Clearing House (ACH) transaction to the bank account specified during reconciliation. An E-mail notifying the Plan Sponsor of payment will be sent to the Account Manager and Authorized Representative.

8. If the Plan Sponsor owes funds to CMS, CMS will send an overpayment notification e-mail to the Plan Sponsor's Authorized Representative, Account Manager, and Designees with Appeal privileges.

9. The Plan Sponsor must maintain and furnish to CMS or the Office of Inspector General (OIG) upon request, the records enumerated in Federal regulations at 42 CFR 423.888(d).  The records must be maintained for 6 years, or any other period as specified by CMS or OIG, after the expiration of the plan year in which the costs were incurred for the purposes of audits and other oversight activities conducted by CMS to assure the accuracy of the actuarial attestation and the accuracy of payments.

Deadlines for Submitting Payment Information

During the RDS application process, the payment frequency (monthly, quarterly, interim annual or annual) is selected. If the Plan Sponsor chose a payment frequency of monthly, the Plan Sponsor can submit up to twelve interim payment requests during prior to submission of the plan year.reconciliation request. If a payment frequency of quarterly was chosen, up to four interim payment requests may be submitted during the plan year. And a. A payment frequency of interim annual will allow the Plan Sponsor to submit one payment request prior to submitting the final reconciliation datarequest for the plan year. Plan Sponsors that chosechoose the payment frequency of annual will not receive interim payments but will receive payment upon submission of reconciliation.their one-time payment request. Only one payment frequency can be chosen for a planan application.

In general, payment requests can be submitted less often than the maximum frequency selected. In that case, sponsors Plan Sponsors will still be able to claim subsidy payments for the periods for which a payment request may be delayed. For example, if a sponsorPlan Sponsor selects monthly payments but a payment request for January cost data is not ready to be submitted until April, that January data may be included as part of the April payment request.

Reconciliation files must be submitted within 15 months following the end of the plan year.

NOTE:Reconciliation, or a final payment request, must be completed no later than the Plan Sponsor's reconciliation deadline. That deadline is the last day of the fifteenth month following the last day of the RDS plan year specified in the application unless otherwise specified by CMS.

If a Plan Sponsor fails to meet the reconciliation deadline for the application(s) and has received interim payments, the sum of those payments will become overpayments.  

Note: CMS will initiate immediate overpayment recovery action.

Note: The above deadlines are for RDS payment processing only. Plan Sponsors must be mindful of other RDS programmatic deadlines.

Where to go for more information

Visit the RDS Center websiteWeb Site at http://rds.cms.hhs.gov for detailed information on the RDS program, including CMS guidance and Frequently Asked Questions (FAQs). . Additionally, you may contact the RDS Center customer service center at (877) RDS-HELP for further assistance.

NOTE: The Note: RDS Payment request(s) and reconciliation data will be submitted electronically and not in hard copy.

Complete the items in PartsPart I through IV. All fields are required unless designated as “optional”. The following are specific instructions for each Part. Only certain items are explained in detail. . Payment

Specific Instructions for PART I. General Section A. Payment Setup Options

This section must be completed before payment processing can begin for an application.

2 (a) – (f) –(Optional) Enter required data if a Plan Sponsor elects to choose a Designee as the Payment Requestor who will request payment for the entire application. Enter information for an existing Designee or a new Designee. Check the appropriate privileges that this Designee should be granted. If a Designee is not established with payment request privileges for the application, the Prior to the Plan Sponsor reporting cost data or requesting payment, either the Authorized Representative or Account Manager must assign specific cost-related and payment-related privileges to the Account Manager, Designees, or Vendors using the RDS Secure Web Site. The user must select the Plan Sponsor ID and Application ID, and then elect to complete payment setup. A single individual may not have both the report costs and request payment privileges on a given application. A cost reporter cannot request payments, and a payment requester cannot report cost data. The Authorized Representative is automatically granted the Request Payment privilege and is not permitted to report cost data. One or more individuals or entities may be assigned to report cost data for a specific Benefit Option. At least one cost reporter must be assigned to each Benefit Option. The Account Manager or Authorized Representative will be responsible for requesting paymentprompted to review all assignments before completing Payment Setup.

Complete items 3 through 6 for each of the application’s benefit options.

3-Enter the unique benefit option identifier listed on the application.

4- Choose the method of submission for reporting cost data for the benefit option. A technical contact must be supplied if reporting cost data by transmitting a file to the RDS Center mainframe.

5- Choose the method of submission for reporting reconciliation data for the benefit option. A technical contact must be supplied if reporting reconciliation data by transmitting a file to the RDS Center mainframe.

6- Enter required data if a Plan Sponsor elects to choose a Designee as the Cost Reporter for this benefit option (optional). Enter information for an existing Designee or new Designee. Check the appropriate privileges that this Designee should be granted. If a Designee with cost reporting privileges is not assigned to a benefit option, the Account Manager or Authorized Representative will be responsible for reporting cost data.

Specific Instructions for PART II Cost Data Overview

The following data items will be required in

1. The Plan Sponsor must (a) Assign one of the listed privileges to the Account Manager. (b) Select a Cost Reporting Method if assigning the Report Costs privilege to the Account Manager. (c) Specify the Benefit Options for which the Account Manager can report cost data.

2. The Plan Sponsor must (a) State if it wishes to specify one or more vendors to report cost data for the application. If question (a) is answered “no” then no further action is required. If question (a) is answered “yes” then items (b-d) are also required. The user must (b) Enter the Vendor ID, and (c) specify each Benefit Option for which the Vendor is permitted to report cost data.

3. The Plan Sponsor must (a) State if it wishes to specify one or more Designees to report cost data or request payment for the application. If question (a) is answered “no” then no further action is required. If question (a) is answered “yes” then item (b-g) are conditionally required as described here. (b) If the Designee exists on the application, select the Designee Name to assign a privilege. Otherwise, enter the E-mail address of the Designee. (c) If the Designee is not already a registered user of the RDS Secure Web Site, the Designee Information must be provided. This Designee Information will be pre-populated if the Designee has been previously established as an RDS Secure Web Site user (d) Select one of the listed privileges for the Designee. (e) Optionally select the Vendor name for which the Designee is permitted to report and/or view cost data. (f-g) If the Designee is reporting cost data to the RDS Center. There are several methods to report cost data but all methods require the reporting of costs by benefit option and month incurred. This information may be manually submitted directly to the RDS Center secure website, or by uploading a file either directly to the RDS Center secure website or to the RDS Center mainframe. The differences between manual data submission and file upload are explained below.

The RDS Center will calculate allowable cost and subsidy payment for the benefit option based on the data submitted. A summary of these calculations by benefit option will be presented to the Payment Requestor. The Payment Requestor will select the benefit options to include in a payment request. The RDS Center will calculate the total subsidy amount and display the amount to the Payment Requestor.

NOTE: When manually submitting cost data, the required time stamp will automatically be inserted. When submitting cost data via file upload, the required time stamp must be inserted by the Cost ReporterPlan Sponsor, specify the cost reporting method and Benefit Options for which the Designee will report cost data. (f-g) Are not required if the Designee is associated with a vendor in item (e).

PART IIA. Rx (prescription) Cost Data – Manual Submission4. Items (a-k) are required on the Authorized Representative Verification form which must be submitted for each Plan Sponsor ID prior to requesting payment for an application.

A. Month of plan year

Calendar months of the plan year.

If after submitting cost data for a month, it is discovered that an adjustment needs to be made, the full amount of the corrected costs should be resubmitted for that month. The RDS Center will compare the new amounts entered to amounts previously entered for the month and make the appropriate adjustments.

B. Premium Costs

Premium Costs – This data item is required if reporting retiree costs is based on a percentage of premium costs for a fully insured benefit option. Estimated premium costs represent the portion of premium costs paid by the sponsor and by the qualifying covered retirees that is associated with the gross retiree costs between the cost threshold and the cost limit for prescription drug coverage under the benefit option (exclusive of administrative costs and risk charges). If entering estimated percentage of premium costs, do not enter any amounts in Gross Retiree Costs (C).

Note: The plan sponsor must use the same method for calculating costs throughout the plan year.

See 42 CFR 423.888(b)(5)

C. Gross Retiree Cost

This data item is the sum of all Gross Retiree Costs for the plan month.

Gross retiree costs are costs, for a qualifying covered retiree who is enrolled in a qualified retiree prescription drug plan during a plan year, non-administrative costs incurred under the plan for Part D drugs during the year, whether paid for by the plan or the retiree, including costs directly related to the dispensing of Part D drugs. Gross retiree costs as defined in regulation 42 CFR 423.882

See 42 CFR 423.882

D. Threshold Reduction

Threshold Reduction – This column represents the sum of Gross Retiree Costs paid per retiree under the benefit option below the threshold per retiree ($251 for plan years ending in 2006). The Cost Reporter is responsible for calculating and entering threshold reduction data for each plan month. The amount entered is the sum of the cost threshold amount attributable to each eligible covered retiree covered by the benefit option. Threshold reductions must not be entered when payment is being estimated based on a percentage of premium costs.

For example if the gross retiree cost for a qualified covered retiree for the plan year in question is $700 the threshold reduction to be entered would be $250.

The threshold reduction will be adjusted annually as stated in 42 CFR 423.886 (b)(3).

E. Limit Reduction

Limit Reduction - This column represents the sum of Gross Retiree Costs paid per retiree under the benefit option in excess of the cost limit per retiree ($5,000 for plan years ending in 2006). Example of individual retiree Limit Reduction calculation:

Retiree A - Gross Rx Cost Paid = $5,010.00

Limit Reduction for Retiree A calculated as

$5,010.00 - $5,000.00 = $10

Retiree B – Gross Rx Cost Paid = $5,750.00

Limit Reduction for Retiree B calculated as

$5,750.00 - $5,000.00 = $750

Aggregated limit reduction for interim payment = $10 + $750 = $760

Limit reductions must not be entered when payment is being estimated based on a percentage of premium costs.

The limit reduction will be adjusted annually as stated in 42 CFR423.886 (b)(3).

F. Estimated Cost Adjustment

The Authorized Representative Verification form is written documentation from the Plan Sponsor verifying that the individual listed on the RDS application as the Authorized Representative is authorized to act on the Plan Sponsor's behalf.

The Authorized Representative Verification form must be completed by a Verifier who is defined as an individual, other than the Authorized Representative, with sufficient authority from the Plan Sponsor to verify that the Authorized Representative, listed on the RDS application, is permitted to act on the Plan Sponsor's behalf for purposes of the RDS Program. If this individual IS NOT an employee of the company, they MUST be listed as the Account Manager in the RDS Secure Web Site to be accepted as the Verifier; otherwise the form will not be approved

The Authorized Representative Verification form must be sent to CMS via Fax, E-mail, or US Mail.

(l) The Verifier's signature certifies that this document is a confirmation for purposes of the CMS' RDS Program, that the individual named in (b) is acting as the Authorized Representative (An Authorized Representative MUST be an individual employed by the Plan Sponsor to whom the Plan Sponsor has granted the legal authority to bind the Plan Sponsor to the terms of the Plan Sponsor Agreement in the RDS application. Examples of the Authorized Representative include the Plan Sponsor's general partner, CFO, CEO, president, Human Resources Director, or an individual who holds a position of similar status and authority within the Plan Sponsor's organization. For multi-employer plans, the Authorized Representative does not have to be an employee of the Plan Sponsor, but may be a member of the jointly appointed board of trustees, which includes both labor and management trustees).

5. Registration data is required for Vendors wishing to provide cost data to the RDS Center mainframe. Plan Sponsors wishing to provide files via mainframe must also provide the same registration data. The Vendor or Plan Sponsor must provide items (a-j). Test and Production File Names and Instructions may also be required.

.

Section B. Cost Data

The available methods for reporting cost data are Mainframe File Transmission and Data Entry on the RDS Secure Web Site. As of the date these instructions were published, Upload on RDS Secure Website is a possible future reporting method. The data elements required to report cost data vary based on the cost reporting method chosen in Part I Section A. Payment Setup.

The data elements required to report cost data vary slightly, based on the payment request type as is indicated in these instructions by the notation of “Interim Only” or “Final Only”. The variation applies, regardless of whether cost data are submitted via data entry or file format.

All reporting methods and payment request types require the reporting of cost data by Application, Benefit Option, and Plan Month incurred. When reporting cost data for a final payment request, costs incurred or zero costs must be reported for all plan months.

1. When entering cost data on the RDS Secure Web Site, the Cost Reporter must select (a) the Plan Sponsor, Application, Benefit Option, and specific Plan Month.

1. (b) For interim cost reporting, the user must provide either (1) Estimated Premium Costs or (2) Gross Retiree Costs, but not both. Items (3-4) (Threshold Reduction and Limit Reduction) are required for interim cost reporting if Gross Retiree Costs are being reported. Item (5) is required if the Plan Sponsor has cost adjustments, except if the Plan Sponsor is submitting estimated premium costs and is including estimated cost adjustments into the amount of reported estimated premium costs.

1. (b) For final cost reporting, the user must provide (2) Gross Retiree Costs. (1) Estimated Premium Costs are not allowable during final cost reporting. Items (3-4) (Threshold Reduction and Limit Reduction) are required for final cost reporting. Item (5) is required during final cost reporting as a final cost adjustment.

When finished entering cost data, the Cost Reporter must submit the cost report to the RDS Center.

2. (a-e) When submitting cost data in a file format, additional aggregations are required by Application and File.

Plan Month

Calendar months specified by the plan year start and end dates of the application.

Estimated Cost Adjustment – An estimate of the expected rebates and other price concessions attributable to the plan and incurred during the plan year. This data item is required when reporting estimated premium costs if rebates and other price concessions are not factored into the premium costs.Premium Costs

G. Actual Cost Adjustment

Actual Cost Adjustment – The actual amount of the rebate and other price concessions that was attributable to the drug cost incurred by the plan during the plan year. This data item is required when reporting a final cost for reconciliation.

PART IIB. Rx (prescription) Cost Data – File Upload

If using file upload, include the same data elements as described in PART IIA. Also include the date and time the file was created. This data item is only required when reporting cost data in a file submission.

Specific Instructions for PART III. Reconciliation File

Reconciliation costs may only be reported in a file format. Reconciliation data must be supplied by either uploading files to the RDS website or transmitting files to the mainframe. The reconciliation costs must be reported by benefit option, at the retiree level, by month. All plans (including those that received interim payments for fully insured benefit options based on a percentage of premiums) must submit actual prescription drug costs, including price concession data, per retiree per month on the reconciliation file. The following are the required data elements:

Application ID (assigned to you by the RDS Center during the application process)

Unique Benefit Option Identifier

Qualified Covered Retiree SSN (required if HICN not supplied).

Qualified Covered Retiree HICN (required if SSN not supplied).

Year and Month of Rx Cost incurred. (YYYYMM)

First Name of Qualified Covered Retiree

Middle Initial of Qualified Covered Retiree

Last Name of Qualified Covered Retiree

Date of Birth

Gender

Gross Retiree Cost

Threshold Reduction

Limit Reduction

Actual Cost Adjustment

Timestamp (Date and time of file creation)

PART IV. This data item is required if reporting interim retiree costs based on a percentage of premium costs for a fully insured benefit option. Estimated premium costs represent the portion of premium costs paid by the Plan Sponsor and by the qualifying covered retirees that are associated with the gross retiree costs between the cost threshold and the cost limit for prescription drug coverage under the benefit option (exclusive of administrative costs and risk charges). It may also include estimated cost adjustments, unless the Plan Sponsor chooses to report those amounts separately. If entering estimated premium costs, do not enter any amounts in Gross Retiree Costs.

Note: The Plan Sponsor must use the same method for reporting costs throughout the plan year. Estimated Premium Costs may not be reporting for a Single Annual Payment or Reconciliation. See 42 CFR §423.888(b)(5)

Gross Retiree Costs

This data item is the sum of all Gross Retiree Costs for the plan month. Gross Retiree Costs are defined in regulation 42 CFR §423.882

Threshold Reduction

The amount below the federally defined cost threshold is not eligible for the subsidy. Therefore Plan Sponsors are not able to claim, for subsidy, this amount of gross covered retiree plan-related prescription drug costs. This ineligible amount is referred to as the threshold reduction.

The Plan Sponsor must calculate the threshold reduction at the retiree level within an application. The threshold reduction amount must be reported to CMS' RDS Center for each benefit option, for each month, and will be the sum of all threshold reductions for all retirees for that benefit option, for that month.  Plan Sponsors must keep retiree-level data for audit purposes.

The threshold reduction will be adjusted annually as stated in 42 CFR §423.886(b)(3).

Limit Reduction

The amount in excess of the federally defined cost limit is not eligible for the subsidy. Therefore Plan Sponsors are not able to claim, for subsidy, this amount of gross covered retiree plan-related prescription drug costs. This ineligible amount is referred to as the limit reduction.

The Plan Sponsor must calculate the limit reduction at the retiree level within an application. The limit reduction amount must be reported to CMS' RDS Center for each benefit option, for each month, and will be the sum of all limit reductions for all retirees for that benefit option, for that month. Plan Sponsors must keep retiree-level data for audit purposes.

The limit reduction will be adjusted annually as stated in 42 CFR §423.886(b)(3).

Estimated/Actual Cost Adjustment

This amount is an estimate of the expected rebates and other price concessions attributable to the plan, for its qualifying covered retirees for Part D drug spend between the cost threshold and cost limit, and incurred during the plan year. This data item is required when reporting estimated premium costs if rebates and other price concessions are not factored into the premium costs.

NOTE: The actual (as opposed to an estimated) amount of the rebate and other price concessions will be required when reporting final cost data for Single Annual Payment or Reconciliation.

Section C. Interim Payment Request Agreement and Electronic Signature

A. Plan Sponsor Payment Agreement

The Payment Requestor must read each clause in this agreement. By submitting the requests for payment and reconciliation, the Plan Sponsor is submitting a claim for payment to the federal government.

B. Authorization

The Payment Requestor must indicate agreement with each clause in this section by providing an electronic signature in Part IV(B). To authorize the RDS payment and reconciliation requests, the Payment requestor must provide an electronic signature.

Only an authorized Payment Requester defined in Part I. Payment Setup may submit an interim payment request.

1. When requesting payment on the RDS Secure Web Site the user must select (a) the Plan Sponsor ID and (b) Application ID. The Payment Requester will be presented with a list of Benefit Options for potential inclusion in the payment request.

2. The Payment Requester must first (a) review the reported cost data for a Benefit Option prior to including the Benefit Option in the payment request. The Payment Requester must then (b) identify which Benefit Options will be included in the payment request.

3. The Payment Requester must read the Payment Agreement. (Refer to collection instrument Part I Section D.)

4. The Payment Requester must indicate acceptance of the Payment Agreement. By submitting the requests for payment, the Plan Sponsor is submitting a claim for payment to the Federal government.

5. The Payment Requester must indicate agreement with the terms of the Payment Agreement by providing an electronic signature

Section D. Payment Agreement

Refer to collection instrument Part 1 Section D.

Section E. Reconciliation and Single Annual Payment

Plan Sponsors that chose an annual RDS payment frequency, or otherwise did not receive any interim payments, and that wish to receive a subsidy, must use the reconciliation process to submit final cost reports and submit their one and only subsidy payment request.

The reconciliation process must be completed before the application’s reconciliation deadline. If the deadline is missed, any subsidies previously paid to the Plan Sponsor for the application will be considered an overpayment and the Federal government will begin proceedings to recover paid funds.

1. Upon selecting a Plan Sponsor ID and an Application ID for Reconciliation or Single Annual Payment, the Reconciliation Checklist is displayed to the user. The Reconciliation Checklist lists the steps necessary to submit a final or single annual payment request to CMS’ RDS Center.

2. Step 1: Initiate Reconciliation.

The Authorized Representative or Account Manager must (a) indicate that the application is ready to proceed with reconciliation for final payment determination, (b) indicate acceptance of the warnings and instructions, and (c) confirm completion of this step.

3. Step 2: Review Payment Setup

The Authorized Representative or Account Manager must (a) accept or modify the cost-related and payment-related privileges described in Part I. Payment Setup Options to complete this step.

4. Step 3: Request List of Covered Retirees

The Authorized Representative, Account Manager, or Designee with required privilege must (a) request a file containing information for each qualifying covered retiree.

5. Step 4: Finalize Covered Retirees

An Authorized Representative, Account Manager, or Designee with required privilege must (a-c) accept the E-PHI agreement and download the covered retiree list requested in Step 3.

Federal law requires that cost data be submitted only for the qualifying covered retirees, corresponding subsidy periods, and the benefit option(s) in which each qualifying covered retiree is enrolled, as listed in the covered retiree list agreed to in Step 4. The Plan Sponsor should not complete Step 4 until it is certain that the retiree data reflected in the most recent covered retiree list is accurate.

The Authorized Representative or Account Manager must (d) indicate agreement with the finalized list of covered retirees and their associated coverage periods and (e) confirm to complete this step.

6. Step 5: Start Preparation of Reconciliation Payment Request

The Account Manager or Designee with required privilege must (a) indicate that the Plan Sponsor is ready for CMS to begin accepting final cost reports for the application to complete this step.

7. Step 6: Manage Submission of Final Cost Reports

Cost report submission dates and statuses are presented by Benefit Option and Cost Reporter in this step along with the available details of each cost report. The Account Manager or Designee with required privilege must (a) indicate that final cost reporting is accurate and complete to (b) confirm to complete this step.

8. Step 7: Review Final Costs

Reported cost data are presented for the application and individual Benefit Options. The Account Manager or Designee with required privilege must (a-b) mark all Benefit Options as reviewed to complete this step. The user is required to (c) confirm to complete this step.

9. Step 8: Enter Revisions to Final Costs

(a) If no revisions are necessary the Account Manager or Designee with required privilege may indicate that no revisions are required to complete this step.

If the user indicates that revisions are necessary in item (a) the Account Manager or Designee with required privilege must provide (b1) reason(s) for the revisions and (b2-5) relevant cost data. The user must (c) confirm to complete this step.

The ability to enter revisions to final cost data by using Step 8 is currently unavailable. Revisions must be accommodated by using final cost reporting. If no revisions are necessary, this step may be completed by the Account Manager or Designee with required privilege.

10. Step 9: Finalize Reconciliation Payment Request

The amount of the final payment request is presented in this step with a summary of cost data and calculated subsidy amount by application and by benefit option. The Account Manager or Designee with required privilege must (a) indicate that the Plan Sponsor is ready to finalize the payment request. The user is required to (b) acknowledge instructions and warnings presented on the page. The user is required to (c) confirm to complete this step.

11. Step 10: Review Electronic Funds Transfer (EFT) Information

The current EFT information is presented in this step. The Account Manager, Authorized Representative or Designee with required privilege must (a) indicate whether they agree to, or wish to change, EFT information.

If the user (a) agrees to the EFT information presented they must (e) confirm to complete this step.

If the user (a) opts to change EFT information they may update items (b-d.) The user is required to (e) confirm to complete this step

12. Step 11: Approve Electronic Funds Transfer (EFT) Information

If no changes are made to the EFT information presented in Step 10, this step is auto-completed and no further action is required in Step 11.

If EFT information was modified in Step 10, the Authorized Representative may (a) accept the EFT information to complete this step.

If the Authorized Representative (a) rejects the EFT information, Step 11 will remain incomplete and Step 10 will again be made incomplete. The Plan Sponsor would then re-complete Step 10.

13. Step 12: Review and Submit Reconciliation Payment Request

The amount of the final payment request is presented in the step with a summary of cost data and calculated subsidy amount by application and benefit option. The Authorized Representative must (a) acknowledge the instructions and warnings listed and accept the payment request to proceed with authorizing the final payment request.

The Authorized Representative must (b 1) read each clause in Reconciliation Agreement.

(Refer to collection instrument Part I Section F.)

The Authorized Representative must (b 2) indicate acceptance of the Reconciliation Agreement.

The Authorized Representative must (b 3) indicate agreement with each clause in Part I Section F by providing an electronic signature. By submitting the request for payment, the Plan Sponsor is submitting a claim for payment to the Federal government.

The Authorized Representative must (c) confirm to complete this step.

Completion of Step 12: Review and Submit Reconciliation Payment Request completes the reconciliation process. At that point, the reconciliation payment request will be processed by CMS. CMS will deposit any monies owed using an Automated Clearing House (ACH) transaction to the bank account specified in Step 10: Review EFT Information. If the sum of the actual allowable retiree costs (ARC) attributable to gross costs between cost threshold and cost limit, submitted with the reconciliation payment request, was less than the sum of ARC attributable to such costs, submitted with the interim payment request(s); then, the amount of retiree drug subsidies received from the interim payments was greater than what should have been received. That is considered an overpayment.

Note:  CMS will initiate immediate overpayment recovery action.

Section F. Reconciliation Agreement

Refer to collection instrument Part 1 Section F.

Part II. Appeals

Section A. Reconsideration Requests

1. A Plan Sponsor is entitled to an informal written reconsideration of an adverse initial determination.  This request should be made through the RDS Secure Web Site. This request must be made by the Plan Sponsor within 15 calendar days from the "sent" date of the e-mail notification from CMS' RDS Center that indicates the adverse initial determination. The Account Manager, Authorized Representative, or Designee with required privilege may select a Plan Sponsor and Application for which to submit an informal written reconsideration. The user must indicate (a) the application number related to the adverse initial determination, (b) findings or issues the sponsor disagrees with (i.e., the initial determination, (c) reason(s) for disagreement, (d) whether the "sent" date on the e-mail notification of the adverse initial determination is within 15 calendar days of today's date, and (e) whether any addition documentary evidence will be sent under separate cover. If the user opts to send (e) additional documentary evidence they may use (f) the additional documentary evidence cover sheet.

2. A Plan Sponsor dissatisfied with CMS' RDS Center's reconsideration decision is entitled to an informal hearing with the CMS Hearing Officer.  This request for an informal hearing must be made in writing and filed with the CMS Hearing Officer within 15 calendar days from the "sent" date of the e-mail notification from CMS' RDS Center that indicates the reconsideration decision.  The request for an informal hearing must (a) include a copy of CMS' RDS Center's reconsideration decision and must (b) specify the findings or issues in the decision with which the Plan Sponsor disagrees and the reasons for the disagreements.  The Plan Sponsor must also provide (c) a Supporting Statement that includes a summary of its position and should be supported by references to the materials that were submitted to CMS in support of the original application and the subsequent request for reconsideration. If relevant materials were not submitted to the Hearing Officer from CMS, the Plan Sponsor may attach, subject to objection, such materials to its Supporting Statement.

3. A Plan Sponsor that has received the CMS’ Hearing Officer's decision upholding CMS' RDS Center's initial or reconsidered determination may request review by the CMS Administrator within 15 days of receipt of the CMS Hearing Officer's decision.  The CMS Administrator may review the CMS Hearing Officer's decision.  The CMS Administrator's determination is final and binding.

Section B. Reopening

A Plan Sponsor may request that CMS reopen and revise an initial or reconsidered determination. The Plan Sponsor must provide (1) the application number related to the initial or reconsidered determination, (2) the initial determination that is the subject of the request for reopening and (3) the reason for the request. The Plan Sponsor may optionally provide (4-5) additional documentary evidence

General Information

Additional data may be collected in support of payment processing in accordance with Federal regulations at 42 CFR §423.888 (d). Such data may include reports and working documents of the actuaries who submitted the actuarial attestation for the RDS application, all documentation of costs incurred and other relevant information utilized for calculating the amount of subsidy payment made in accordance with 42 CFR §423.886, including the underlying claims data, any other records specified by CMS. CMS may issue additional guidance addressing recordkeeping requirements, including (but not limited to) the use of electronic media.

The data element choices may change as additional features become available in the RDS Secure Web Site. For instructions and information, please go to the RDS Program Web Site at http://rds.cms.hhs.gov.

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CMS Form # 10170