CMS-10137 2013 Application for New Cost Plan

Applications for Medicare Part D plans: PDP Plans, MA-PD Plans, Cost Plans, PACE organizations, SAE and EGWP

2013 Application for New Cost Plan

CY 2012-Applications for Medicare Part D Plans; PDP Plans, MA-PD Plans, Cost Plans, PACE Organizations, SAE and EGWP

OMB: 0938-0936

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MEDICARE PRESCRIPTION DRUG BENEFIT
Solicitation for Applications for New Cost Plan Sponsors
2013 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 22.5 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
Expiration:

1

1.

2.

GENERAL INFORMATION ..................................................................................... 6
1.1.

Purpose of Solicitation ...................................................................................... 6

1.2.

Background ....................................................................................................... 6

1.3.

Objectives and Structure ................................................................................... 6

1.4.

Schedule ........................................................................................................... 8

1.5.

Summary of Cost Plan 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........................................................................ 10

1.6.3.

Education and Outreach .......................................................................... 11

1.6.4.

Marketing Guidelines and Review ........................................................... 11

1.6.5.

Eligibility for the Low Income Subsidy Program ....................................... 12

1.6.6.

General Enrollment Processing ............................................................... 12

1.6.7.

Payment to Cost Plan Sponsors .............................................................. 12

INSTRUCTIONS .................................................................................................... 14
2.1.

Overview ......................................................................................................... 14

2.2.

Other Technical Support ................................................................................. 14

2.3.

Health Plan Management System (HPMS) Data Entry ................................... 14

2.4.

Instructions and Format of Qualifications ........................................................ 15

2.4.1.

Instructions .............................................................................................. 15

2.4.2. Applicant Seeking to Offer New Employer/Union-Only Group Waiver Plans
(EGWPs) ................................................................................................................ 16
2.4.3.

Applicant Entity Same as Contracting Entity ............................................ 17

2.4.4.

Withdrawal of a Part D Application .......................................................... 17

2.4.5.

Technical Assistance ............................................................................... 17

2.5.

Submission Software Training ........................................................................ 17

2.6.

System Access and Data Transmissions with CMS ........................................ 18

2.6.1.

HPMS ...................................................................................................... 18

2.6.2.

Enrollment and Payment.......................................................................... 18

2.6.3.

Payment for Cost Plan Sponsors ............................................................. 19

2.7.

Summary Instruction and Format for Individual Market Bids ........................... 19

2.7.1.

Format of Bids ......................................................................................... 19

2.7.2.

CMS Review of Bids ................................................................................ 20

2.7.3.
2.8.

Pharmacy Access ........................................................................................... 21

2.8.1.

Retail Pharmacy Access .......................................................................... 21

2.8.2.

Home Infusion Pharmacy Access ............................................................ 23

2.8.3.

Long-Term Care Pharmacy Access ......................................................... 23

2.8.4.
(I/T/U)

Indian Tribe and Tribal Organization, and Urban Indian Organization
................................................................................................................. 23

2.8.5.

Waivers Related to Pharmacy Access ..................................................... 23

2.9.

3.

Overview of Bid Negotiation..................................................................... 21

Waivers Related to Attestations for Cost Plan EGWP Applicants ................... 24

2.10.

Standard Contract with Cost Plan Sponsors ............................................... 25

2.11.

Protection of Confidential Information ......................................................... 25

APPLICATION ....................................................................................................... 26
3.1.

Applicant Experience, Contracts, Licensure and Financial Stability ................ 26

3.1.1. Management and Operations 42 CFR Part 423 Subpart K; CMS issued
guidance 08/15/06 and 08/26/08 ............................................................................ 26
3.1.2. Program Integrity 2 CFR § 376 and Compliance Program 42 CFR §
423.504(b)(4)(vi); Prescription Drug Benefit Manual, Chapter 9 ............................ 32
3.1.3. HPMS Part D Contacts CMS Guidance issued 08/16/06, 08/22/07,
11/30/07, 08/06/07, 03/17/09, 07/09/09, 08/04/09, and 01/25/10 ........................... 33
3.2.

Benefit Design................................................................................................. 36

3.2.1. Formulary/Pharmacy and Therapeutics (P&T) Committee Affordable Care
Act, §3307, 42 CFR §423.120(b), 42 CFR §423.272(b)(2); Prescription Drug
Benefit Manual, Chapter 6; CMS issued guidance 03/25/10 .................................. 36
3.2.2. Utilization Management Standards 42 CFR §423.153(b); Prescription Drug
Benefit Manual, Chapter 6 and Chapter 7 .............................................................. 41
3.2.3. Quality Assurance and Patient Safety Affordable Care Act § 3310; 42 CFR
§423.153(c); Prescription Drug Benefit Manual, Chapter 7 .................................... 42
3.2.4. Medication Therapy Management 42 CFR §423.153(d); The Affordable
Care Act § 10328; Prescription Drug Benefit Manual, Chapter 7; .......................... 43
3.2.5. Electronic Prescription Program and Health Information Technology
Standards 42 CFR §423.159; Prescription Drug Benefit Manual, Chapter 7; P.L.
111-5 (2009); 2010 Call Letter ............................................................................... 45
3.3. General Pharmacy Access 42 CFR §423.120(a); Prescription Drug Benefit
Manual, Chapter 5 ..................................................................................................... 46
3.3.1. Retail Pharmacy 42 CFR §423.120(a); 42 CFR §423.859(c); Prescription
Drug Benefit Manual, Chapter 5 ............................................................................. 47

3.3.2. Out of Network Access 42 CFR §423.124; Prescription Drug Benefit
Manual, Chapter 5.................................................................................................. 49
3.3.3. Mail Order Pharmacy 42 CFR §423.120(a)(10); Prescription Drug Benefit
Manual, Chapter 5.................................................................................................. 50
3.3.4. Home Infusion Pharmacy 42 CFR §423.120(a)(4); Prescription Drug
Benefit Manual, Chapter 5 ..................................................................................... 51
3.3.5. Long -Term Care (LTC) Pharmacy 42 CFR §423.120(a)(5); Prescription
Drug Benefit Manual, Chapter 5; CMS issued guidance 04/28/09 ......................... 51
3.3.6. Indian Health Service, Indian Tribe and Tribal Organization, and Urban
Indian Organization (I/T/U) Pharmacy 42 CFR §423.120(a)(6); Prescription Drug
Benefit Manual, Chapter 5 ..................................................................................... 53
3.3.7.

Specialty Pharmacy Prescription Drug Benefit Manual, Chapter 5 .......... 54

3.4. Enrollment and Eligibility 42 CFR §423.30; Prescription Drug Benefit Manual,
Chapters 3, 4, and 13; Plan Communications User Guide; CMS issued guidance
07/21/09..................................................................................................................... 55
3.5. Complaints Tracking Prescription Drug Benefit Manual, Chapter 7; CMS issued
guidance 11/16/06, 07/28/2008, and 12/09/08 .......................................................... 57
3.6. Medicare Plan Finder Prescription Drug Benefit Manual, Chapter 7; CMS
issued guidance 07/17/06, 11/20/07, 08/21/08, 05/20/10 ......................................... 58
3.7. Grievances 42 CFR Part 423 Subpart M; Prescription Drug Benefit Manual,
Chapter 18 ................................................................................................................. 59
3.8. Coverage Determinations (including Exceptions) and Appeals 42 CFR Part
423 Subpart M; Prescription Drug Benefit Manual, Chapter 18; Part D QIC
Reconsideration Procedures Manual ......................................................................... 60
3.9. Coordination of Benefits 42 CFR Part 423 Subpart J; Prescription Drug Benefit
Manual, Chapter 14 ................................................................................................... 63
3.10.
Tracking Out-of Pocket Costs (TrOOP) Affordable Care Act § 3314; 42 CFR
Part 423 Subpart J; Prescription Drug Benefit Manual, Chapters 13 and Chapter 14 66
3.11.
Medicare Secondary Payer 42 CFR §423.462; Prescription Drug Benefit
Manual, Chapter 14 ................................................................................................... 68
3.12.
Marketing/Beneficiary Communications 42 CFR §423.50, 42 CFR §423.128;
42 CFR §423.505; Prescription Drug Benefit Manual, Chapter 2 .............................. 68
3.13.

Provider Communications Prescription Drug Benefit Manual, Chapter 2 .... 72

3.14.
Reporting Requirements Affordable Care Act § 6005; 42 CFR §423.514;
2010 Reporting Requirements ................................................................................... 73
3.15.
(k)

Data Exchange between Part D Sponsor and CMS 42 CFR §423.505(c) and
.................................................................................................................... 76

3.16.
Health Insurance Portability and Accountability Act of 1996 (HIPAA), Health
Information Technology for Economic and Clinical Health Act (HITECH), and Related

CMS Requirements 45 CFR Parts 160, 162, and 164; CMS issued guidance
08/15/2006 and 08/26/08 ........................................................................................... 77
3.17.
Prohibition on Use of SSN or Medicare ID number on Enrollee ID Cards
Prescription Drug Benefit Manual, Chapter 2 ............................................................ 78
3.18.

Record Retention 42 CFR §423.505(d) ....................................................... 79

3.19.
Prescription Drug Event (PDE) Records; 42 CFR Part 423 Subpart G; CMS
issued guidance 04/27/2006, 06/23/2006, 12/17/20101, 03/01/2011, 03/04/2011,
04/28/2011, 05/16/2011 ............................................................................................. 79
3.20.
Claims Processing; 42 CFR §423.120(c)(4); 42 CFR §423.466; CMS issued
guidance 04/26/2006, 01/13/2010, and 03/29/2010 .................................................. 80
3.21.

Premium Billing 42 CFR §423.293; CMS issued guidance 03/08/2007 ....... 82

3.22.
Consumer Assessment of Healthcare Providers and Systems (CAHPS)
Survey Administration 42 CFR §423.156 ................................................................... 83
4.

CERTIFICATION ................................................................................................... 84

5.

APPENDICES ........................................................................................................ 85
APPENDIX I – Summary of PDP Application Requirements Fulfilled under Part C
for Cost Plan Prescription Drug Applicants ......................................................... 86
APPENDIX II—Attestation for Cost Plan Employer/Union-Only Group Waiver
Plans (800-Series) .............................................................................................. 87
APPENDIX III—Direct Contract PDP Attestation ................................................ 92
Appendix IV—Organization Background and Structure ...................................... 96
APPENDIX V—Crosswalks of Section 3.1.1D Requirements in Subcontracts
submitted as Attachments to Section 3.1.1 ........................................................ 97
APPENDIX VI – Crosswalk for Retail Pharmacy Access Contracts ................. 101
APPENDIX VII – Crosswalk for Mail Order Pharmacy Access Contracts ......... 104
APPENDIX VII – Crosswalk for Home Infusion Pharmacy Access Contracts .. 107
APPENDIX IX – Crosswalk for Long-Term Care Pharmacy Access Contracts 110
APPENDIX X – Crosswalk for Indian Tribe and Tribal Organization, and Urban
Indian Organization (I/T/U) Pharmacy Access Contracts ................................. 115
APPENDIX XI – Applicant Submission of P&T Committee Member List and
Certification Statement ..................................................................................... 119
APPENDIX XII – I/T/U Revised Addendum ...................................................... 124
APPENDIX XII – Compliance Program Crosswalk ........................................... 132

1. GENERAL INFORMATION
1.1. Purpose of Solicitation
The Centers for Medicare & Medicaid Services is seeking applications from qualified
entities to enter into cost contracts under section 1876 of the Social Security Act
(referred to here as ―Cost Plan sponsors‖ or ―Cost Plan Applicants‖) 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 already has a Cost Plan
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.

1.2. Background
The Medicare Prescription Drug Benefit program was established by section 101 of the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), as
amended by the Patient Protection and Affordable Care Act, as amended, and is
codified in sections 1860D-1 through 1860 D-43 of the Social Security Act (the Act).

1.3. Objectives and Structure
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 offer a Part D supplemental benefit in
addition to their Cost Plan (either in the individual market, or a combination of both the
individual and employer 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, entities offering a stand-alone PDP, and for entities offering PACE Plans
with a Part D benefit. Reference throughout this solicitation will be made to a Part D
Sponsor, which is meant to encompass stand-alone PDPs, MA Plans with a Part D
benefit, PACE Plans, and Cost Plans with a Part D benefit.
Medicare reasonable cost plans (as defined under Section 1876 of the Social Security
Act), and PACE organizations (as defined in section 1894 of the Social Security Act),
may also offer pharmacy benefits under the MMA. Those entities must not complete
this Part D qualification application, but should refer to the separate applications posted
on the CMS website.
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 costsharing structure other than the statutorily defined structure (subject to certain actuarial
tests). (Sponsors are required to follow our formulary guidance. See Section 2.7.1 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.
CMS payment for qualified drug benefits is separate from interim and settlement cost
payments Cost Plan sponsors receive for Part A and/or Part B services under their cost
contract agreements. CMS provides payment to Cost Plan sponsors in the form of
advance monthly payments, reinsurance subsidies (when incurred), and low-income
subsidies. Further detail on payment for Part D services is provided in Section 2.6 of
this document.
As stated above, Section 1876 cost contractors are not required to offer a Part D benefit
to their enrollees. Section 1876 cost contractors may offer qualified prescription drug
coverage as an optional supplemental benefit under 42 CFR §417.440(b)(2). Further,
Section 1876 cost contractors may offer enhanced prescription drug coverage, but only
if they offer the basic Part D benefit to their enrollees as well. Section 1876 Cost Plan
enrollees may elect whether to receive their Part D benefits through their Medicare Cost
Plan. In the alternative, they may elect to enroll in a PDP to receive prescription drug
benefits.

1.4. Schedule
APPLICATION REVIEW PROCESS
Date

Milestone

November 11, 2011

Recommended date by which Applicants should
submit their Notice of Intent to Apply Form to CMS to
ensure access to Health Plan Management System
(HPMS) by the date applications are released

December 6, 2011

CMS User ID form due to CMS

January 10, 2012

Final Applications posted by CMS

February 7, 2012

Deadline for NOIA form submission to CMS

February 21 , 2012

Applications due

March 23, 2012

Release of Health Plan Management System
(HPMS) formulary submissions module

April 6, 2012

Plan Creation module, Plan Benefit Package (PBP),
and Bid Pricing Tool (BPT) available on HPMS

April 16, 2012

Formulary submission due to CMS
Transition Policy Attestations and Policy due to
CMS

May 2012

CMS sends Part D contract eligibility determination
to Applicants, based on review of application.
Applicant‘s bids must still be negotiated (see below)

May 11, 2012

PBP/BPT Upload Module available on HPMS

June 4, 2012

All bids due

Early August 2012

CMS publishes national average Part D premium

September 2012

CMS completes review and approval of bid data.
CMS executes Part D contracts to those
organizations who submit an acceptable bid

October 15, 2012

2013 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.

1.5. Summary of Cost Plan Sponsor Role and Responsibilities
Key aspects of each Cost Plan 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 Cost Plan
sponsor‘s approved service area.
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, making discounts for applicable
name brand drugs available to eligible enrollees (i.e., non-LIS beneficiaries in the
coverage gap) at the point of sale, 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 Plan Finder tool. Sponsors must submit data based on the format and
schedule provided by CMS.

1.6. Summary of CMS Role and Responsibilities
1.6.1. Application Approval, Part D Bid Review, and Contracting Processes
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 21, 2012 to determine
whether the Applicant meets the qualifications we have established to enter into a Part
D addendum to the Applicant‘s cost contract.
The second phase has two steps – the formulary upload which begins March 23, 2012
and the bid upload which begins May 11, 2012. 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; includes all drugs in certain classes and categories as
established by the Secretary, 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
addendum as a result of successfully completing phase one and two will be offered a
Part D addendum to their Medicare Cost plan contract by CMS.

1.6.2. Part D Program Oversight
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. This monitoring system was developed in
coordination with CMS personnel responsible for oversight of the Medicare Advantage
program to minimize duplication of effort. 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.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 the Part D sponsors‘ grievance processes as
well as conduct periodic site visits to verify Part D 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 Plan Finder,
and we also post information regarding the issuance of Corrective Action Plans on our
website.
If any trends we identify indicate less than satisfactory performance as described in 42
CFR §423.505(n)), 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 Office of the Inspector General or to Federal and State authorities
where violations of laws under the jurisdictions of these agencies are in question.

1.6.3. Education and Outreach
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 Plan Finder assists
beneficiaries in finding a plan to meet their specific needs; refer to the
www.medicare.gov/find-a-plan 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.

1.6.4. Marketing Guidelines and Review
Marketing Guidelines are posted on the www.cms.gov/ website. Part D sponsors are
required to adhere to these guidelines in developing their marketing materials and

marketing strategy. Cost Plan sponsors are required to submit materials to CMS based
on the marketing guidelines.

1.6.5. Eligibility for the Low Income Subsidy Program
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 lowincome 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), 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.gov/ website.

1.6.6. General Enrollment Processing
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.gov/
website.

1.6.7. Payment to Cost Plan Sponsors
CMS provides payment to Cost Plan sponsors in the form of advance monthly
payments (consisting of the Cost Plan sponsor‘s Part D standardized bid, risk adjusted
for health status, minus the beneficiary monthly premium), estimated reinsurance
subsidies, estimated low-income subsidies (low-income cost sharing and premiums),
and estimated gap discount payments. After the end of the payment year, CMS
reconciles the actual amounts of low-income cost sharing subsidies, reinsurance

amounts, and gap discount 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.gov website.

2. INSTRUCTIONS
2.1. Overview
This application is to be completed only by section 1876 Cost Plan contractors that
intend to offer a new Part D benefit to their Cost Plan enrollees during 2012. This
application is to be submitted to CMS in conjunction with your organization‘s attestation
to renew your cost contract with CMS in 2013.

2.2. Other Technical Support
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.
CMS provides two user manuals to assist applicants with the technical requirements of
submitting the Part D application through the Health Plan Management System
(HPMS). The Basic Contract Management User‟s Manual provides information on
completing and maintaining basic information required in Contract Management. These
data must be completed prior to the final submission of any application. The Online
Application User‟s Manual provides detailed instructions on completing the various
online applications. Both manuals can be found in HPMS by clicking on Contract
Management>Basic Contract Management>Documentation.

2.3.

Health Plan Management System (HPMS) Data Entry

Cost Plan organizations that submit a Notice of Intent to Apply form are assigned a
pending contract number (H number) to use throughout the application and subsequent
operational processes. Once the contract number is assigned, and Cost Plan
Applicants apply for, and receive, their CMS User ID(s) and password(s) for HPMS
access, they are required to input contact and other related information into the HPMS.
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 status 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 and throughout the contract year. It
is important that the information in HPMS is accurate at all times.

2.4. Instructions and Format of Qualifications
Applications may be submitted until February 21, 2012. Applicants must use the 2013
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. 2012 and earlier).

2.4.1. Instructions
Applicants will complete the entire solicitation via HPMS.
In preparing your application in response to the prompts in Section 3 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 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 that its
organization complies with the relevant requirements as of the date your application is
submitted to CMS, unless a different date is stated by CMS.
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 obtain a confirmation number indicates that an applicant failed to properly
submit its 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 [email protected] 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 application due date.

CMS clarified its Part D application review standards in a final rule (4085-F) published in
the Federal Register on April 15, 2010, with an effective date of June 7, 2010.
Applicants must demonstrate that they meet all (not substantially all) Part D program
requirements to qualify as a Part D sponsor in their proposed service area.
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 meets 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. 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 21, 2012. 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 2013 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 21, 2012; 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.

2.4.2. Applicant Seeking to Offer New Employer/Union-Only Group Waiver
Plans (EGWPs)
All new Part D 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 II. The attestation provided in

Appendix I specifies those individual market requirements that are not applicable in the
employer market.
Cost Plan applicants must have the same service area for its Part D EGWPs as its
individual plan service area.

2.4.3. Applicant Entity Same as Contracting Entity
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.

2.4.4. Withdrawal of a Part D Application
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
[email protected] and [email protected] and 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 email.

2.4.5. Technical Assistance
For technical assistance in the completion of this Application, contact:
Linda Anders by email at [email protected], 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 uploading or completing any part of this solicitation
within HPMS prior to the submission deadline. Applicants requesting technical
assistance with uploading or completing any part of the online HPMS application after
the published CMS application deadline will not be granted technical assistance, nor the
opportunity to complete their application submission.

2.5. Submission Software Training
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
23, 2012. The deadline for formulary submission to CMS is 11:59 PM EDT on April 16,
2012. 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 11, 2012 and the CY
2013 bid deadline of June 4, 2012. 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 2012.

2.6. System Access and Data Transmissions with CMS
2.6.1. HPMS
Cost Plan sponsors 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. Cost Plan
sponsors are required to secure access to HPMS in order to carry out these functions.

2.6.2. Enrollment and Payment
All Cost Plan 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, Cost Plan sponsors must contact the
MAPD Help Desk at 1-800-927-8069 for specific guidance on establishing connectivity
and the electronic submission of files. Instructions are also on the MAPD Help Desk
web page, www.cms.gov/mapdhelpdesk, in the Plan Reference Guide for CMS Part
C/D systems link. The MAPD 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 Cost Plan sponsor for each of their plans with member and planlevel information. Cost Plan sponsors must compare the membership and payment
information in those reports on a monthly basis with their records and report any
discrepancies to CMS according to the instructions and within the timeframes provided
by CMS for that purpose. Each Cost Plan sponsor must complete and submit the
monthly CEO certification of enrollment data for payment on or before 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
http://www.cms.gov/MAPDHelpDesk/02_Plan_Communications_User_Guide.asp#TopOfP

age). The MAPD Help Desk also provides additional system and technical information
at www.cms.gov/mapdhelpdesk/.

2.6.3. Payment for Cost Plan Sponsors
Payments to Cost Plan sponsors for their Part D services 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). CMS must receive current banking
information at a minimum of 6 weeks prior to the first payment to your organization. The
specific banking information form and instructions may be obtained from the CMS
Central Office contacts listed in Appendices B of the Plan Communication User‘s Guide
found at [email protected].
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, low-income subsidies, and estimated gap discount amounts are
also included.

2.7. Summary Instruction and Format for Individual Market Bids
Cost Plan sponsors must submit to CMS a bid for each prescription drug plan it intends
to offer. Applicants using this solicitation may apply to offer full risk Part D plans.
Applicants must submit their formularies to HPMS on or before April 16, 2012 and the
PBPs and BPTs on or before the bid submission date.

2.7.1. Format of Bids
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 23April 16, 2012. 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 provide 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, copayments, or payments for the difference between the plan‘s allowance and an out-ofnetwork 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 a 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 42 CFR §423.265. In addition, consistent with
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.
Pursuant to section 42 CFR §423.265(b), multiple bid submissions must reflect
differences in benefit packages or plan costs that CMS determines represent substantial
differences relative to a sponsor‘s other bid submissions. In order to be considered
―substantially different,‖ each bid must be significantly different from the sponsor‘s other
bids with respect to beneficiary out-of-pocket costs or formulary structures. Applicants
should review the CMS guidance on the submission of bids that are meaningfully
different released on April 16, 2010.

2.7.2. CMS Review of Bids
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).

2.7.3. Overview of Bid Negotiation
CMS evaluates the reasonableness of bids submitted by Cost Plan 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.

2.8. Pharmacy Access
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 standards 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.

2.8.1. Retail Pharmacy Access
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.

Applicants may use their contracted PBM‘s existing 2012 Part D network to
demonstrate compliance with retail pharmacy access standards. If an Applicant is
creating a new Part D network, the submission must be based on executed contracts for
Year 2013. CMS conducts the review of Retail Pharmacy Access based on the service
area that the Applicant has provided in HPMS by February 21, 2012. In an effort to
reduce Applicant errors, CMS has automated the retail pharmacy access review.
Applicants are required to input their pending service area into HPMS and, as explained
in section 3.3.1B, Applicants must upload the retail pharmacy list in HPMS. Based on
the pending service area documented in HPMS, the retail pharmacy list uploaded by the
Applicant, and the Medicare Beneficiary Count file available on the CMS application
guidance website, CMS will generate access percentages for all applicants. (In prior
years, applicants provided their geo-reports as part of the pharmacy uploads.) In
addition, CMS will use the information gathered from the pharmacy list upload to identify
pharmacy addresses.
With limited exceptions, this information gathered from the pharmacy lists will be used
by CMS to geo-code the specific street-level locations of the pharmacies to precisely
determine retail pharmacy access. Exceptions to this process may include, but not be
limited to, those instances where a street-level address cannot be precisely geo-coded.
In those situations, CMS will utilize the ZIP code-level address information to geo-code
the approximate pharmacy location.
In previous years CMS allowed Part D applicants to use one of several geo-coding
methodologies: representative ZIP code geo-coding, or the more precise geo-coding
methods including ZIP+4 Centroid Method, ZIP+@ Centroid Method, referred to as
address-based geo-coding. As a result, some organizations may previously have
coded all pharmacy addresses at the ZIP code/county level as opposed to the more
precise street-level coding. CMS strongly encourages applicants conduct a closer and
more precise inspection of their retail pharmacy locations and network access prior to
submitting their pharmacy list.
The retail pharmacy lists may contain contracted pharmacies that are outside of the
Applicant‘s pending service area (to account for applicants who contract for a national
pharmacy network); however, CMS will only evaluate retail pharmacy access for the
pending service area.
The retail pharmacy access calculations must meet the established standards at one of
the following points in time:
At the HPMS gate closing time of the 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.
While Applicants are required to demonstrate that they meet the Part D pharmacy
access requirements at the time this application is submitted to CMS, CMS expects that
pharmacy network contracting will be ongoing in order to maintain compliance with our
retail pharmacy access requirements.

2.8.2. Home Infusion Pharmacy Access
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 3.3.4). 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.

2.8.3. Long-Term Care Pharmacy Access
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 3.3.5). 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.

2.8.4. Indian Tribe and Tribal Organization, and Urban Indian Organization
(I/T/U)
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 3.3.6). 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.gov/PrescriptionDrugCovContra/
website.

2.8.5. Waivers Related to Pharmacy Access
Waivers for Cost Plans. CMS guidance regarding waivers of the pharmacy access and
any willing pharmacy requirements for certain Cost Plan sponsors is contained at
sections 50.7 and 50.8.1 of Chapter 5 of the Prescription Drug Benefit Manual. These
waivers are described below.

Waiver of Retail Convenient Access Standards
As described in section 50.7.1 of Chapter 5 of the Prescription Drug Benefit Manual, the
requirement that Applicants must offer their Part D plan benefit through a contracted
retail pharmacy network that meets CMS convenient access standards is waived for
Applicants that operate their own pharmacies. Applicants must demonstrate at the plan
level that a majority (50%) of the prescriptions are filled at retail pharmacies owned and
operated by the organization in order to be granted the waiver.
Waiver of Any Willing Pharmacy Requirements
As described in section 50.8.2 of Chapter 5 of the Prescription Drug Benefit Manual, the
requirement that Applicants must offer a network pharmacy contract to any willing
pharmacy that agrees to accept Applicant‘s standard terms and conditions is waived for
Applicants that own and operate the pharmacies in their network. Applicants must
demonstrate at the plan level that at least 98% of prescriptions are filled through
pharmacies that are owned and operated by plan sponsor in order to be granted the
waiver.
Waivers for Plans in the Territories (excluding Puerto Rico)
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 either at 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 3.3.1E of this solicitation.

2.9. Waivers Related to Attestations for Cost Plan EGWP Applicants
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.
Note: Applicants should review the waivers currently approved by CMS in Chapter
12 of the Medicare Prescription Drug Benefit manual to assess whether the
sponsoring organization is similarly situated to qualify for an existing waiver prior to
submitting a request to CMS.

2.10. Standard Contract with Cost Plan Sponsors
Successful Applicants will be deemed qualified to enter into a Part D addendum to their
section 1876 Cost Plan contract allowing the Applicant to offer a Medicare prescription
drug plan(s) as an optional supplemental benefit 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 addendum. 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.

2.11. Protection of Confidential Information
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.

3. APPLICATION
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 Cost Plan 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 are in compliance with such guidance. 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.

3.1. Applicant Experience, Contracts, Licensure and Financial
Stability
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.

3.1.1. Management and Operations 42 CFR Part 423 Subpart K; CMS issued
guidance 08/15/06 and 08/26/08
A. In HPMS, complete the table below:
Applicant must attest ‗yes‘ or, if permitted, ―NA‖,
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:
1. Applicant is a legal entity that intends to enter into
a Medicare Prescription Drug Plan addendum to
its Cost Plan contract with CMS.

Yes

No

NA

Requesting
Waiver? Yes

or No

2. If Applicant, Applicant‘s parent organization, or
any subsidiaries of Applicant‘s parent organization
has an existing contract(s) with CMS to operate a
Prescription Drug Plan(s), at least one of those
contracts has been in effect since January 1, 2011
or earlier.
3. Applicant abides by all applicable Federal laws,
regulations and CMS instructions.
4. Applicant maintains contracts or other legal
arrangements between or among the entities
combined to meet the functions identified in
subsection 3.1.1C.
5. Applicant does not have any covered persons who
also served as covered persons for an entity that
nonrenewed a contract pursuant to 42 CFR
§423.507(a), or that terminated its contract with
CMS by mutual consent, pursuant to 42 CFR
§423.508, or unilaterally, pursuant to 42 CFR
§423.510, since June 6, 2011. ―Covered
persons‖, as defined at 42 CFR §§ 423.507(a)(4),
423.508(f), 423.510(e)(2), include:
All owners of nonrenewed or terminated
organizations who are natural persons, other than
shareholders who have an ownership interest of
less than 5 percent;
An owner of a whole or part interest in a
mortgage, deed of trust, note, or other obligation
secured (in whole or in part) by the organization,
or by any property or assets thereof, which whole
or part interest is equal to or exceeds 5 percent of
the total property and assets of the organization;
and
A member of the board of directors or board of
trustees of the entity, if the organization is
organized as a corporation.
B. Upload in HPMS, organizational background and structure information.
Submit this information by downloading the appropriate template found in HPMS
that mimics the Appendix entitled, Organization Background and Structure. Also
upload into HPMS proof of your organization‘s incorporation, such as articles of
incorporation or a certificate of good standing from your state of incorporation.

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 and
whether the first tier,
downstream and
related entities are
off-shore:
(Indicate with ―name
of Applicant‘s
Organization‖ where
applicant will
perform those
functions)

Function

A pharmacy benefit program
that performs adjudication
and processing of pharmacy
claims at the point of sale.
A pharmacy benefit program
that performs negotiation
with prescription drug
manufacturers and others for
rebates, discounts, or other
price concessions on
prescription drugs.
A pharmacy benefit program
that performs administration
and tracking of enrollees‘
drug benefits in real time,
including TrOOP balance
processing.
A pharmacy benefit program
that performs coordination
with other drug benefit
programs, including, for
example, Medicaid, state
pharmaceutical assistance
programs, or other
insurance.
A pharmacy benefit program
that develops and maintains
a pharmacy network.
A pharmacy benefit program
that operates an enrollee
grievance and appeals
process

First tier,
Downstream and
Related entities

Off-Shore
yes/no

A pharmacy benefit program
that performs customer
service functionality, that
includes serving seniors and
persons with a disability.
A pharmacy benefit program
that performs pharmacy
technical assistance service
functionality.
A pharmacy benefit program
that maintains a
pharmaceutical and
therapeutic committee.
A pharmacy benefit program
that performs enrollment
processing.
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 or related entity identified in Sections
3.1.1 C and with any first tier, downstream, or related entity that contracts with
any of the identified entities on the applicant‘s behalf. All contracts must:
1. Clearly identify the parties to the contract (or letter of agreement). If the applicant is
not a direct party to the contract (e.g., if one of the contracting entities is entering
into the contract on the applicant‘s behalf), the applicant must be identified as an
entity that will benefit from the services described in the contract.
2. Describe the functions to be performed by the first tier, downstream or related entity,
and the reporting requirements the first tier, downstream, or related entity has to the
Applicant. 42 CFR §423.505(i)(4)(i)
3. 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).
4. Contain flow-down clauses requiring that their activities be consistent and comply
with the Applicant‘s contractual obligations as a Part D sponsor. 42 CFR
§423.505(i)(3)(iii)
5. Describe the payment the first tier, downstream, or related entity will receive for
performance under the contract, if applicable.
6. Clearly indicate 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 October 15
extending through the full contract year ending on December 31 of the next year).
7. Be signed by a representative of each party with legal authority to bind the entity.
8. 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)
9. 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.
10. 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(e)(2) and (i)(2)
11. 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)
12. 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)
13. 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)
14. 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)
15. 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 423.520

16. 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(b)(21) and 423.505(i)(3)(viii)(B)
17. If the first tier, downstream, or related entity will establish the pharmacy network or
select pharmacies to be included in the network and a prescription drug pricing
standard is used for reimbursement, contain a provision that updates to such a
prescription drug pricing 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)
18. 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 the
network pharmacies to submit claims to the Part D sponsor or first tier, downstream
or related entity whenever the membership ID card is presented or on file at the
pharmacy unless the enrollee expressly requests that a particular claim not be
submitted. 42 CFR § 423.120(c)(3)
19. If the first tier, downstream, or related entity will adjudicate and process claims at the
point of sale and/or negotiate with prescription drug manufacturers and others for
rebates, discounts, or other price concessions on prescription drugs contain
language that the first tier, downstream, or related entity will comply with the
reporting requirements established in Section 6005 of the Affordable Care Act.
Each complete contract must meet all of the above requirements when read on its own.
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.
If the Applicant fails to upload crosswalks for executed agreements and contract
templates, CMS cannot guarantee that the Applicant will receive notice of any
deficiencies in the contracting documents as part of this courtesy review.
F. In HPMS, complete the table below:
Attest ‗yes‘ or ‗no‘ to the following qualification by clicking on the
appropriate response in HPMS:

Yes

1. Applicant is applying to operate as a Part D sponsor through a joint
enterprise agreement.
G. 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

No

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.

3.1.2. Program Integrity 2 CFR § 376 and Compliance Program 42 CFR §
423.504(b)(4)(vi); Prescription Drug Benefit Manual, Chapter 9
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

Requesting
Waiver?

Yes or No

1. Applicant, applicant staff, and its affiliated companies,
subsidiaries or first tier, downstream and related entities,
and staff of the first tier, downstream and related entities
agree that they are bound by 2 CFR Part 376 and attest
that they are not excluded by the Department of Health
and Human Services Office of the Inspector General or by
the General Services Administration exclusion lists.
Please note that this includes any member of its board of
directors, and any key management or executive staff or
any major stockholder. Additionally, given Medicare
payment may not be made for items or services furnished
by an excluded provider or entity, applicant should follow
the guidance provided in the January 13, 2010 HPMS
memo entitled Claims for Drugs Prescribed or Dispensed
by Excluded Providers.
B. Provide as an upload via HPMS, in a .pdf format, a copy of your organization‘s
Medicare Part D Compliance Program that you intend to use for this contract.
The Part D compliance program must be in accordance with 42 CFR 423.504(b)(4)(vi).
The compliance program must explicitly include the name of the applicant. (The name
of a parent organization is insufficient.) The Part D compliance program must include
all 7 elements in the regulation and in Chapter 9 and are specific to the issues and
challenges presented by the Part D program. The compliance plan must explicitly state
that it encompasses Medicare Part D. A general compliance program applicable to
healthcare operations is not acceptable.
Please be advised that the Applicant is ultimately responsible for the implementation
and monitoring of the day-to-day operations of its Part D compliance program. 42 CFR
§ 423.504(b)(vi)(B)(1) and 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) must be an
employee of the Applicant, the Applicant‘s parent organization, or a corporate affiliate of
the Applicant. A compliance program adopted and operated by an Applicant‘s first tier,
downstream, and related entities is not sufficient to demonstrate that the Applicant
meets the compliance program requirement.
C. In HPMS, complete and upload the table in Appendix XII for the Compliance
Plan.

3.1.3. HPMS Part D Contacts CMS Guidance issued 08/16/06, 08/22/07,
11/30/07, 08/06/07, 03/17/09, 07/09/09, 08/04/09, and 01/25/10
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

Corporate Mailing
CEO – Sr. Official for
Contracting
Chief Financial Officer
Medicare Compliance
Officer
Enrollment Contact
Medicare Coordinator
System Contact
Customer Service

Name/Title Mailing
Address (PO
Boxes may
not be used)

Phone/Fax
Numbers

Email
Address

Operations Contact
General Contact
User Access Contact
Backup User Access
Contact
Marketing Contact
Medical Director
Bid Primary Contact
Payment Contact
Part D Claims
Submission Contact
Formulary Contact
Pharmacy Network
Management Contact
Medication Therapy
Management Contact
Part D Benefits
Contact
Part D Quality
Assurance Contact
Part D Application
Contact
Pharmacy Director
HIPAA Security Officer
HIPAA Privacy Officer
Part D Price File
Contact (Primary)
Part D Price File
Contact (Back-up)

Part D Appeals
Government Relations
Contact
Emergency Part D
Contact
Pharmacy Technical
Help Desk Contact
Processor Contact
CMS Casework
Communication
Contact
Part D Exceptions
Contact
Coordination of
Benefits Contact
CEO – CMS
Administrator Contact
Plan to Plan
Reconciliation Contact
Bid Audit Contact
Plan Directory Contact
for Public Website
CAP Report Contact
for Public Website
Financial Reporting
Contact
Best Available
Evidence Contact
Automated TrOOP
Balance Transfer
Contact

Agent/Broker
Compensation Data
Contact
Complaint Tracking
Module (CTM) Contact
Part D Reporting
Requirement Contact
Fraud Investigations
Contact
Reconciliation Contact
DIR Contact
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

Requesting
Waiver?

Yes or No

1. Applicant agrees that CMS may release contact
information to States, SPAPs, providers, Part D sponsors,
and others who need the contact information for legitimate
purposes.

3.2. Benefit Design
3.2.1. Formulary/Pharmacy and Therapeutics (P&T) Committee Affordable
Care Act, §3307, 42 CFR §423.120(b), 42 CFR §423.272(b)(2); Prescription
Drug Benefit Manual, Chapter 6; CMS issued guidance 03/25/10
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:
1. Applicant will submit a formulary to CMS for the Part D
benefit by the date listed in section 1.4.
2. Applicant will link all associated contracts to an initial
formulary submission on or before the formulary

Yes

No

Requesting
Waiver?

Yes or No

submission deadline; otherwise, Applicant will be
considered to have missed the formulary submission
deadline.
3. Applicant complies with formulary guidance that is
contained in Chapter 6 of the Prescription Drug Benefit
Manual, the HPMS Formulary Submission Module and
Reports Technical Manual, and all other formulary
instructions.
4. Applicant agrees, when using a formulary, to meet all
formulary submission deadlines established by CMS.
Applicant further agrees that CMS may discontinue its
review of the Applicant‘s formulary submission upon the
Applicant‘s failure to meet any of the formulary submission
deadlines. Applicant acknowledges that failure to receive
CMS approval of its formulary may prevent CMS from
approving the Applicant‘s bid(s) and contracting with the
Applicant for the following benefit year.
5. Applicant agrees that its formulary includes substantially all
drugs in the protected classes that are specified as of the
CMS-established formulary submission deadline.
Applicant further agrees that any new drugs or newly
approved uses for drugs within the protected classes that
come onto the market after a CMS-established formulary
submission deadline will be subject to an expedited P&T
committee review. The expedited review process requires
P&T committees to make a decision within 90 days, rather
than the normal 180-day requirement.
6. Applicant provides for an appropriate transition for new
enrollees into Part D plans following the annual
coordinated election period, newly eligible Medicare
enrollees from other coverage, individuals who switch from
one plan to another after the start of the contract year, and
current enrollees remaining in the plan affected by
formulary changes prescribed Part D drugs that are not on
its formulary. This transition process satisfies the
requirements specified in Chapter 6 of the Prescription
Drug Benefit Manual.
7. Applicant attests that its organization‘s approach to
transitioning beneficiaries on drug regimens that are not on
the plan‘s Part D approved formulary meets CMS criteria.
The transition policy attestation will be completed in HPMS
by close of business on the CMS-established formulary

submission deadline in section 1.4.
8. Applicant agrees to submit its organization‘s transition
policy and a description of how the transition policy will be
implemented within the applicant‘s claims adjudication
system, including pharmacy notification via email to
[email protected] by close of business on the
CMS-established formulary submission deadline in section
1.4.
9. Applicant extends, where appropriate, transition periods
beyond 30 days for enrollees using non-formulary drugs
that have not been transitioned to a formulary drug or gone
through the plan exception process within 30 days.
10. Applicant ensures that staff is trained and information
systems are in place to accommodate administration of the
transition policy. This includes adoption of necessary
information system overrides.
11. Applicant provides an emergency supply of non-formulary
Part D drugs (31-day supplies, unless the prescription is
written for fewer days) for long-term care residents to allow
the plan and/or the enrollee time for the completion of an
exception request to maintain coverage of an existing drug
based on reasons of medical necessity.
12. Applicant has appropriate timeframes and ―first fill‖
procedures for non-formulary Part D medications in longterm care and retail settings.
13. Applicant abides by CMS guidance related to vaccine
administration reimbursement under Part D.
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:
1. Applicant is using the P&T Committee of its PBM for purposes of the
Part D benefit.
2. If answered yes to B1, Applicant‘s PBM is operating under a

Yes

No

confidentiality agreement for purposes of the P&T Committee (meaning
Applicant has no knowledge of the membership of the PBM‘s P&T
Committee). (If not applicable, check ―NO.‖) Note: If answer is YES,
then Applicant must complete P&T Committee Certification Statement
and PBM must complete the P&T Committee Member List located in
the Appendix entitled Applicant Submission of P&T Committee Member
List and Certification Statement.
3. Applicant develops and uses a P&T committee to develop and review
the formulary and to ensure that the formulary is appropriately revised
to adapt to both the number and types of drugs on the market.
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.
4. Applicant‘s P&T committee first looks at medications that are clinically
effective. When two or more drugs have the same therapeutic
advantages in terms of safety and efficacy, the committee may review
economic factors that achieve appropriate, safe, and cost-effective drug
therapy.
5. Applicant assures that the P&T committee uses appropriate scientific
and economic considerations to consider utilization management
activities that affect access to drugs, such as access to non-formulary
drugs, prior authorization, step therapy, generic substitution, and
therapeutic interchange protocols.
6. Applicant‘s P&T committee reviews and approves all clinical prior
authorization criteria, step therapy protocols, and quantity limit
restrictions applied to each covered Part D drug.
7. Applicant adheres to P&T guidelines that will, from time to time, be
promulgated with regard to such subject areas as membership, conflict
of interest, meeting schedule, meeting minutes, therapeutic classes,
drug review and inclusion, formulary management, utilization
management and review, formulary exceptions, and educational
programs for providers.
8. Applicant‘s P&T committee makes a reasonable effort to review a new
FDA approved drug product within 90 days, and will make a decision on
each new drug product within 180 days of its release onto the market,
or a clinical justification will be provided if this timeframe is not met.
These timeframes also include the review of products for which new
FDA indications have been approved.

9. Applicant‘s P&T committee approves inclusion or exclusion of the
therapeutic classes in the formulary on an annual basis.
10. The majority of the membership of the Applicant‘s P&T committee are
practicing physicians and/or practicing pharmacists.
11. The membership of the Applicant‘s P&T committee includes at least
one practicing physician and at least one practicing pharmacist who are
both free of conflict with respect to the Applicant organization and
pharmaceutical manufacturers.
12. The membership of the Applicant‘s P&T committee includes at least
one practicing physician and at least one practicing pharmacist who are
experts in the care of the elderly or disabled persons.
13. Applicant‘s P&T committee recommends protocols and procedures for
the timely use of and access to both formulary and non-formulary drug
products.
14. Applicant verifies that their P&T Committee members (listed in 3.2.1 C)
do not appear on the HHS Office of Inspector General‘s Exclusion List.
This list can be found at http://exclusions.oig.hhs.gov/search.html
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.
D. 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:
1. Applicant‘s formulary includes at least two Part D drugs
that are not therapeutically equivalent and bioequivalent in
each therapeutic category and class of covered Part D
drugs – except where a particular category or class
includes only one Part D drugs – as provided at 42 CFR
§423.120(b)(2)(i).

Yes

No

Requesting
Waiver?
Yes or No

2. Applicant seeks to obtain a waiver of the requirement at 42
CFR §423.120(b)(2)(i) for applicable formulary categories
and classes when Part D home infusion drugs are provided
as part of a bundled service as a supplemental benefit
under Part C.
3. If Applicant attests YES to 3.2.1D2, it always covers a
particular home infusion drug as part of a bundled service
under Part C.
4. If Applicant attests YES to 3.2.1D2, it ensures that the
bundled service is available to all enrollees of any MA-PD
plan in which it chooses to provide Part D home infusion
drugs as part of a supplemental benefit under Part C.
5. If Applicant attests YES to 3.2.1D2, it appropriately
apportions costs to Part C components of its bid to account
for these drugs as a Part C supplemental benefit, as well as
provides, in a supplemental formulary file submission, the
home infused covered Part D drugs that are offered as part
of a supplemental benefit under Part C.

3.2.2. Utilization Management Standards 42 CFR §423.153(b); Prescription
Drug Benefit Manual, Chapter 6 and Chapter 7
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.
1. Applicant maintains policies and procedures to prevent
over-utilization and under-utilization of prescribed
medications, including but not limited to the following
elements:
Programs designed to improve adherence/compliance with
appropriate medication regimens
Monitoring procedures to discourage over-utilization
through multiple prescribers or multiple pharmacies
Quantity versus time edits
Early refill edits
2. Applicant maintains methods to ensure cost-effective drug
utilization management. Examples of these tools include,

Yes

No

Requesting
Waiver?
Yes or No

but are not limited to:
Step therapy
Prior authorization
Tiered cost-sharing
3. Applicant makes enrollees aware of utilization management
(UM) program requirements through information and
outreach materials.
4. Applicant has incentives to reduce costs when medically
appropriate such as, but not limited to encouragement of
generic utilization.
5. Applicant submits corresponding utilization management
criteria for each drug identified on the Applicant‘s formulary
flat file with prior authorization or step therapy via HPMS.

3.2.3. Quality Assurance and Patient Safety Affordable Care Act § 3310; 42
CFR §423.153(c); Prescription Drug Benefit Manual, Chapter 7
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:
1. Applicant has a concurrent drug utilization review program
that includes but is not limited to, the following checks each
time a prescription is dispensed:
Screening for potential drug therapy problems due to
therapeutic duplication;
Age/gender-related contraindications;
Over-utilization and under utilization;
Drug-drug interactions;
Incorrect drug dosage or duration of drug therapy;
Drug-allergy contraindications; and
Clinical abuse/misuse.
2. Applicant performs retrospective drug utilization review.

Yes

No

Requesting
Waiver?

Yes or No

3.2.4. Medication Therapy Management 42 CFR §423.153(d); The Affordable
Care Act § 10328; Prescription Drug Benefit Manual, Chapter 7;
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:
1. Applicant develops and implements a Medication Therapy
Management (MTM) Program designed to :
Ensure optimum therapeutic outcomes for targeted
beneficiaries through improved medication use
For targeted beneficiaries, reduce the risk of adverse
events, including adverse drug interactions
2. Applicant develops the MTM program in cooperation with
licensed and practicing pharmacists and physicians.
3. Applicant targets beneficiaries for enrollment in the MTM
program based on all three of the following criteria:
Beneficiary must have multiple chronic diseases, with three
chronic diseases being the maximum number an Applicant
may require for targeted enrollment;
Beneficiary must be taking multiple covered Part D drugs,
with eight Part D drugs being the maximum number of
drugs an Applicant may require for targeted enrollment; and
Beneficiary must be identified as likely to incur annual costs
for covered Part D drugs in an amount greater than or
equal to $3000 increased by the annual percentage
specified in 42 CFR § 423.104(d)(5)(iv).
4. Applicant has an appropriate MTM enrollment policy which
enrolls targeted beneficiaries using an opt-out method of
enrollment only.
5. Applicant has an appropriate MTM enrollment policy which
targets beneficiaries for enrollment at least quarterly during
each year.
6. Applicant has appropriate policies and procedures for
offering a minimum level of MTM services for each
beneficiary enrolled in the MTMP that includes all of the
following:

Yes

No

Requesting
Waiver?

Yes or No

Interventions for both beneficiaries and prescribers;
An annual comprehensive medication review (CMR) with
written summaries. The CMR must include an interactive,
person-to-person , or telehealth consultation performed by
a pharmacist or other qualified provider unless the
beneficiary is in a long-term care setting. The Summary
resulting from the CMR must comply with the requirements
for a standardized format as specified by CMS, and
Quarterly targeted medication reviews with follow-up
interventions when necessary.
7. The Applicant agrees to submit a description of its MTM
program including, but not limited to, policies, procedures,
services, payments and criteria provided in item #3 above
used for identifying beneficiaries eligible for the MTM
program. Note: Instructions to submit a description of your
MTM program will be forthcoming in future guidance from
CMS and this description is not due at the time of this
application.
8. Applicant has an appropriate policy on how they will set
MTM fees paid to pharmacists or others providing MTM
services for covered Part D drugs. The policy will explain
how the Applicant‘s fee or payment structure takes into
account the resources used and the time required for those
providing MTM services.
9. The Applicant agrees to submit a description of how they
will set MTM fees paid to pharmacists or others providing
MTM services for covered Part D drugs. The policy will
explain how the Applicant‘s fee or payment structure takes
into account the resources used and the time required for
those providing MTM services. Note: Instructions to submit
a description of MTM fees with a description of your MTM
program will be forthcoming in future guidance from CMS
and is not due at the time of this application.
10. Applicant has appropriate policies and procedures to meet
CMS expectations for administering the MTM program,
including, but not limited to, services, payments and criteria
used for identifying beneficiaries eligible for the MTM
program. Such expectations include:
Once enrolled, beneficiaries will not be disenrolled from the
MTMP program if they no longer meet one or more of the
MTMP eligibility criteria (as determined by the organization)

and will remain in the MTMP program for the remainder of
the calendar year.
Applicant‘s MTMP will serve and provide interventions for
enrollees who meet all three of the required criteria as
defined above regardless of setting (e.g., ambulatory, long
term care, etc.)
Applicant‘s MTMP will not include discriminatory exclusion
criteria. If an enrollee meets all three of the required criteria
as described by your organization, the enrollee should be
eligible for MTM intervention.
Applicant will consider the provision of other prescription
drug quality improvement interventions to beneficiaries who
do not meet all three of the required MTMP criteria as
described by your organization, however, these
beneficiaries cannot be considered for MTM reimbursement
by CMS.
Applicant will put into place safeguards against
discrimination based on the nature of their MTM
interventions (i.e., TTY if phone based, Braille if mail based,
etc.)
Applicant will promote continuity of care by performing an
end-of-year analysis that identifies current MTM program
participants who will continue to meet eligibility criteria for
the next program year for the same plan.
Applicant will have procedures in place to drive participation
and follow-up with beneficiaries that do not respond to initial
offers for MTM services.
Applicant will consider using more than one approach when
possible to reach all eligible patients who may wish to
receive MTM services.
Applicant will analyze and evaluate their MTMP and make
changes to continuously improve their programs.

3.2.5. Electronic Prescription Program and Health Information Technology
Standards 42 CFR §423.159; Prescription Drug Benefit Manual, Chapter
7; P.L. 111-5 (2009); 2010 Call Letter
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

Yes

No

Requesting
Waiver?
Yes or No

clicking on the appropriate response in HPMS:
1. Applicant supports and complies with electronic prescription
standards relating to covered Part D drugs for Part D
enrollees.

3.3. General Pharmacy Access 42 CFR §423.120(a); Prescription
Drug Benefit Manual, Chapter 5
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

Requesting
Waiver?

Yes or No

1. Applicant permits in its plan networks any pharmacy that
accepts and meets the plans‘ standard terms and
conditions. However, terms and conditions may vary,
particularly with respect to payment terms to accommodate
geographical areas (e.g. rural pharmacies) or different
types of pharmacies (e.g. mail order and retail), provided
that all similarly-situated pharmacies are offered the same
standard terms and conditions.
2. Applicant does not require a pharmacy to accept insurance
risk as a condition of participation in the Cost Plan‘s
optional supplemental Part D pharmacy network.
3. Applicant agrees to notify CMS when the Applicant changes
its pharmacy benefit manager.
4. Applicant agrees to notify CMS about any substantive
change in its pharmacy network that may impact its ability
to maintain a Part D pharmacy network that meets CMS‘
requirements.
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 projected
service area includes states in which I/T/U pharmacies reside. If Applicant has
contracted with a Pharmacy Benefit Manager 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.

3.3.1. Retail Pharmacy 42 CFR §423.120(a); 42 CFR §423.859(c);
Prescription Drug Benefit Manual, Chapter 5
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:
1. Applicant meets the CMS Standards for Convenient Access
[42 CFR §423.120 (a)(1) and (2) no later than the
application submission date.
2. Applicant agrees that when Applicant is offering extended
supplies via mail order, it also has contracts with a sufficient
number of network retail pharmacies so as to ensure that
enrollees have reasonable access to the same extended
day supply benefits at retail that are available at mail-order.
B. Upload in HPMS the Retail Pharmacy List:

Yes

No

Requesting
Waiver?

Yes or No

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.
C. 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.
1. 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.
2. Indicate the geographic areas in which the applicant cannot demonstrate that it
meets the retail pharmacy convenient access standards
3. Explain why these standards cannot be met. Include in the discussion relevant
information such as geographic barriers, pharmacy infrastructure barriers, and/or
market barriers.
4. 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.
D. 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

Region 35 – American Samoa
Region 36 – Guam
Region 37 – Northern Mariana Islands
Region 39 – US Virgin Islands
E. Complete the following if you marked YES to requesting a waiver of
convenient access standards for any of the territories in 3.3.1E. In HPMS, in .pdf
format, provide the following information:
1. Explain why your organization cannot demonstrate compliance with the access
standards or why these standards cannot be met.

2. Describe the Applicant‘s efforts to identify and contract with all of the retail
pharmacies in each of the applicable territories.
3. 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).
F. In HPMS complete the table below:
Waiver of Retail Convenient Access Standards
Provide the number of prescriptions provided in 2010 by retail pharmacies
owned and operated by Applicant
Provide the number of prescriptions provided in 2010 at all retail pharmacies
contracted by Applicant.
NOTE: CMS will determine the percentage of prescriptions provided at retail
pharmacies owned and operated by Applicant over total prescriptions provided at all
retail pharmacies contracted by Applicant.
G. In HPMS complete the table below:
Waiver of Any Willing Pharmacy Requirements
Provide the number of prescriptions provided in 2010 by all pharmacies owned
and operated by Applicant
Provide the number of prescriptions provided in 2010 at all pharmacies
contracted by Applicant.
NOTE: CMS will determine the percentage of prescriptions provided at all pharmacies
owned and operated by Applicant over total prescriptions provided at all pharmacies
contracted by Applicant.

3.3.2. Out of Network Access 42 CFR §423.124; Prescription Drug Benefit
Manual, Chapter 5
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:
1. Applicant agrees that enrollees have adequate access to
covered Part D drugs dispensed at out-of-network
pharmacies when an enrollee cannot reasonably be
expected to obtain such drugs at a network pharmacy and
provided such enrollees do not access Part D drugs at an

Yes

No

Requesting
Waiver?

Yes or No

out-of-network pharmacy on a routine basis. The coverage
rules applicable to covered Part D drugs dispensed at outof-network pharmacies may generally mirror those
applicable to covered Part D drugs dispensed at network
pharmacies (to the extent that the out-of-network pharmacy
has the ability to effectuate those coverage rules).
However, Applicant agrees to develop policies and
procedures governing reasonable rules for appropriately
limiting out-of-network access (for example, quantity limits,
purchase of maintenance medications via mail-order for
extended out-of-area travel, or plan notification or
authorization processes).
2. Applicant agrees that enrollees have adequate access to
covered Part D drugs dispensed at physician offices for
covered Part D drugs that are appropriately dispensed and
administered in physician offices (e.g. Part D-covered
vaccines).
3. Applicant abides by 42 CFR §423.124(b) relating to the
financial responsibility for out-of-network access to covered
Part D drugs and may require its Part D enrollees
accessing covered Part D drugs to assume financial
responsibility for any differential between the out-of-network
pharmacy‘s usual and customary price and the MA-PD
sponsor plan allowance, consistent with the requirements of
42 CFR §§ 423.104(d)(2)(i)(B) and 423.104(e).
4. Applicant does not routinely permit coverage of more than a
month‘s supply of medication to be dispensed at an out-ofnetwork pharmacy. Applicant may override the one month
limit only on a case-by-case basis when warranted by
extraordinary circumstances.

3.3.3. Mail Order Pharmacy 42 CFR §423.120(a)(10); Prescription Drug
Benefit Manual, Chapter 5
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.
1. Applicant offers mail order pharmacy as part of its Part D

Yes

No

Requesting
Waiver?

Yes or No

plan(s).
2. If Applicant attests ‗Yes‘ to 3.3.3A1, does Applicant‘s mail
order contract include an extended (e.g., 90) day supply?
3. If Applicant attests ‗YES‘ to 3.3.3A2, then Applicant
includes in its contracts with at least some retail pharmacies
a provision that allows a retail pharmacy to offer an
extended supply of drugs to any Plan beneficiary at the
same price, reimbursement rate and cost sharing as the
Plan‘s mail order pharmacy or pharmacies—the network
mail order pharmacy rate; or an Applicant may use an
alternative retail/mail order pharmacy rate with a higher
contracted reimbursement rate provided that any differential
in charge between the Network Mail Order Pharmacy rate
and the higher contract reimbursement rate would be
reflected in higher cost sharing paid by the beneficiary.
Applicant must ensure that the availability of an extended
day supply at retail does not increase the costs to the
government and that enrollee cost-sharing for an extended
day supply never exceeds what the enrollee would have
paid had he/she filled his/her prescription in multiple onemonth supply increments at retail pharmacy rates.
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.

3.3.4. Home Infusion Pharmacy 42 CFR §423.120(a)(4); Prescription Drug
Benefit Manual, Chapter 5
. 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.

3.3.5. Long -Term Care (LTC) Pharmacy 42 CFR §423.120(a)(5);
Prescription Drug Benefit Manual, Chapter 5; CMS issued guidance
04/28/09
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

Yes

No

Requesting
Waiver?

Yes or No

clicking on the appropriate response in HPMS:
1. Applicant offers standard contracting terms and conditions
to all long-term care pharmacies in its service area. These
terms and conditions must include all the performance and
service criteria for long-term care pharmacies that are cited
in § 50.5.2 of Chapter 5 of the Prescription Drug Benefit
Manual.
2. Applicant attests that all of the Part D contracted
pharmacies in Applicant‘s LTC network have signed directly
or through a power of attorney a contract that meets the
LTC performance and service criteria established by CMS.
3. Applicant recognizes the CMS special election period
(SEP) or open enrollment period for institutionalized
individuals for Part D drug plan enrollment and
disenrollment for beneficiaries entering, living in, or leaving
a long-term care facility.
4. Applicant ensures convenient access to network LTC
pharmacies for all of their enrollees residing in an IMD or
ICF-MR designated by the State as an institution and in
which any institutionalized individuals reside.
5. Applicant provides convenient access to network LTC
pharmacies for all of their enrollees who are inpatients in a
hospital that is a ―medical institution‖ under section
1902(q)(1)(B) of the Act – and therefore would meet the
Part D definition of a LTC facility – and whose Part A
benefits have been exhausted.
6. Applicant contracts with a sufficient number of LTC
pharmacies to provide all of the plan‘s institutionalized
enrollees‘ convenient access to the plan‘s LTC pharmacies.
7. Applicant does not rely upon beneficiary SEPs or on out-ofnetwork access in lieu of contracting with a sufficient
number of pharmacies to ensure that an enrollee can
remain in his or her current plan for as long as he/she
reside in an LTC facility in Applicant‘s service area.
8. Applicant ensures that LTC pharmacy contracting activity is
ongoing as Applicant continues to identify LTC facilities and
LTC pharmacies.
9. Applicant agrees that the appropriate action to take when a

beneficiary is enrolled in its plan and Applicant does not
have a contract with an LTC pharmacy that can serve the
LTC facility in which that enrollee resides is to sign a
contract with the facility‘s contracted pharmacy, or – if that
pharmacy will not sign a contract – with another pharmacy
that can serve that facility. Applicant recognizes that, in
some cases, a retroactive contract may be necessary to
ensure convenient access to LTC pharmacies.
10. Applicant readily negotiates with States with regard to
contracting with State-run and operated LTC pharmacies in
facilities such as ICFs/MR, IMDs, and LTC hospitals. States
may not be able to agree to certain clauses in some LTC
standard contracts because of constitutional and legal
restraints. Applicants should be prepared to negotiate with
States to address these issues.
11. Applicant utilizes CMS data on beneficiary residence in
LTC facilities to facilitate its LTC contracting efforts.
12. Applicant, in contracting with LTC pharmacies, does not
agree to particular contracting terms and conditions
containing provisions that have the net result of creating a
non-uniform benefit for plan enrollees served by those LTC
pharmacies relative to those residing in LTC facilities
serviced by other network LTC pharmacies whose contracts
with the Applicant may not include the same provisions.
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.

3.3.6. Indian Health Service, Indian Tribe and Tribal Organization, and
Urban Indian Organization (I/T/U) Pharmacy 42 CFR §423.120(a)(6);
Prescription Drug Benefit Manual, Chapter 5
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:
1. Using the list of I/T/U pharmacies provided at the
www.cms.gov/PrescriptionDrugCovContra/ indicate whether your service
area includes at least one state in which an I/T/U pharmacy
resides.

Yes

No

N/A

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:
2. Applicant offers standard terms and conditions that conform to the
model contract addendum provided by CMS to all I/T/U pharmacies
in its service area by sending a conforming contract offer to all such
pharmacies. The model contract addendum is posted on the
www.cms.gov/PrescriptionDrugCovContra/ website. The model
contract addendum account for differences in the operations of
I/T/U pharmacies and retail pharmacies.
3. Applicant agrees to submit documentation upon CMS‘ request to
demonstrate offering all I/T/U pharmacies in its service area a
conforming contract. Such documentation may be proof of fax or
U.S. postage or other carrier‘s receipt of delivery.
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.

3.3.7. Specialty Pharmacy Prescription Drug Benefit Manual, Chapter 5
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:
1. Applicant does not restrict access to Part D drugs by
limiting distribution through a subset of network
pharmacies, except when necessary to meet FDA limited
distribution requirements or to ensure the appropriate

Yes

No

Requesting
Waiver?

Yes or No

dispensing of Part D drugs that require extraordinary
special handling, provider coordination, or patient education
when such extraordinary requirements cannot be met by a
network pharmacy. Applicant agrees that additional
education or counseling alone does not qualify a drug for
limited distribution within the overall pharmacy network.
2. Applicant does not restrict access solely on the placement
of a Part D drug in a ―specialty/high cost‖ tier because this
tier placement alone is not indicative of any special
requirements associated with such drug. Applicant further
agrees that any drug-by-drug requirements for network
pharmacies only apply to special handling and dispensing
that may be required for a particular ―specialty‖ drug and
not to reimbursement or other standard terms and
conditions.
3. Applicant does not require a pharmacy to be a ―specialty‖
pharmacy in order to dispense any drug that requires
special handling if the network pharmacy is capable of
appropriately dispensing the particular Part D drug or drugs
in question.

3.4. Enrollment and Eligibility 42 CFR §423.30; Prescription Drug
Benefit Manual, Chapters 3, 4, and 13; Plan Communications User
Guide; CMS issued guidance 07/21/09
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.
1. Applicant complies with the CMS MA Eligibility and
Enrollment and Disenrollment Guidance documents that
are provided on the www.cms.hhs.gov/ website.
2. Applicants identifies full dual and other LIS eligible
individuals enrolled in MA-only plans and conducts autoand facilitated enrollment of these individuals in accordance
with the guidance provided by CMS.
3. Applicant complies with CMS operational guidance on
Creditable Coverage and the Late Enrollment Penalty.

Yes

No

Requesting
Waiver?
Yes or No?

4. Applicant has business processes for quickly resolving
urgent issues affecting beneficiaries, such as late changes
in enrollment or copay status, in collaboration with CMS
caseworkers.
5. Applicant queries the Batch Eligibility Query (BEQ) or the
User Interface (UI) for every new enrollment request to
receive:
Verification of Medicare Entitlement and Part D Eligibility,
Periods of enrollment in a Medicare plan that provides
prescription drug coverage, and
Periods of enrollment in a retiree prescription drug plan
whose sponsor receives a retiree drug subsidy from
Medicare.
Information regarding the Low Income Subsidy applicable
to each new enrollee
6. Applicant collects, reviews and transmits creditable
coverage information in accordance with CMS guidance
and policies.
7. Applicant uses information provided by CMS, including the
Low-Income Subsidy/Part D Premium Report Data File, to
determine match rates of their information to that of CMS
within 72 hours of receipt. Applicant further agrees that
their match rate should achieve 95 percent and that nonmatches are resolved within 72 hours.
8. Applicant adheres to CMS‘s Best Available Evidence policy
under 42 CFR §423 .800(d), under which an individual can
provide acceptable evidence supporting a revised costsharing amount that the sponsor must accept for the
purpose of administering the benefit, and to submit
information to CMS with respect to Best Available Evidence
in accordance with CMS procedures outlined in Chapter 13
of the Prescription Drug Manual.
9. Applicant has a process is in place to transmit plangenerated enrollment transactions that include active 4Rx
data, and for CMS-generated enrollments, to transmit active
4Rx data on an update transaction within 3 business days
of receipt of the TRR transmitting the enrollments.

10. Applicant does not disenroll members for failure to pay
premiums (or notify them of impending disenrollment) in
cases where the member has requested that premiums be
withheld from his/her Social Security benefit check in
accordance with CMS Enrollment and Disenrollment
Guidance and Premium Payment policies.
11. Applicant does not disenroll a member or initiate the
disenrollment process if the organization has been notified
that a State Pharmaceutical Assistance Program (SPAP) or
other payer intends to pay the entire Part D premium on
behalf of an individual.
12. Applicant transmits enrollment and disenrollment and
change transactions within the timeframes provided in CMS
Enrollment and Disenrollment guidance and in accordance
with the published MARx Monthly Processing Calendar.
13. Applicant reviews all systems responses, files and reports
received from CMS and compare these to its internal data
to identify discrepancies and reconcile enrollment
information, beneficiary status (such as LIS) and payment
data.
14. Applicant completes the reconciliation of all enrollment,
membership and payment data, and submits requests for
valid discrepancy corrections in compliance with the 45-day
schedule to submit the monthly CEO certification of
enrollment data for payment.
15. Applicant establishes connectivity to CMS as noted in the
instructions provided by the MAPD Help Desk at 1-800-9278069 or via the MAPD Help Desk webpage,
www.cms.gov/mapdhelpdesk, in the Plan Reference Guide
for CMS Part C/D system link.
16. Applicant obtains a CMS User ID and Password.

3.5. Complaints Tracking Prescription Drug Benefit Manual, Chapter
7; CMS issued guidance 11/16/06, 07/28/2008, and 12/09/08
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

Yes

No

HPMS:
1. Applicant resolves 95% of complaints designated as immediate needs
complaints via the CMS Complaints Tracking Module within 2 calendar
days.
2. Applicant is expected to resolve at least 95% of complaints designated as
―urgent‖ via the CMS Complaints Tracking Module in accordance with
CMS issued guidance.
3. Applicant is expected to resolve at least 95% of complaints without an
issue level via the CMS Complaints Tracking Module in accordance with
CMS issued guidance.
4. Applicant monitors and documents complaint resolutions for complaints
attributed to their contracts in the CMS‘ Complaint Tracking Module in
accordance with CMS‘ Standard Operating Procedures for Part D
sponsors.
5. Applicant maintains Standard Operating Procedures that address how its
organization will handle and quickly resolve immediate action cases, as
well as, outline the steps the organization intends to take to have
enrollees call your customer service directly for the prompt resolution of all
inquiries.

3.6. Medicare Plan Finder Prescription Drug Benefit Manual, Chapter
7; CMS issued guidance 07/17/06, 11/20/07, 08/21/08, 05/20/10
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:
1. Applicant provides current and accurate calendar year drug pricing and
pharmacy network data for publishing on the ―Medicare Plan Finder
(MPF)‖ in the format and on a schedule required by CMS.
2. Applicant performs quality checks for data submitted to CMS for display
on the MPF and agrees that failure to conduct quality checks may result in
suppression of the Applicant‘s pricing data from the website.
3. Applicant agrees that errors or omissions identified by CMS during
analyses of the data will also result in the suppression of the Applicant‘s
pricing data from the website.

Yes

No

4. Applicant agrees to respond to CMS‘ MPF quality assurance outlier emails
as directed by CMS, and agrees that failure to respond in accordance with
these directions will result in the suppression of the Applicant‘s pricing
data from the website.

3.7. Grievances 42 CFR Part 423 Subpart M; Prescription Drug
Benefit Manual, Chapter 18
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:
1. Applicant processes beneficiary grievances consistent with 42 CFR §423
subpart M.
2. Applicant abides by Chapter 18 of the Prescription Drug Benefit Manual.
3. Applicant, consistent with 42 CFR §423.564:
Tracks and addresses enrollees‘ grievances,
Processes enrollees‘ grievances within the appropriate timeframes,
Works with the QIO to resolve quality of care grievances when
appropriate,
Provides appropriate and timely notification to enrollees of grievance
dispositions, and
Trains relevant staff and first tier, downstream and related entities on all
regulatory requirements.
4. Applicant informs enrollees aware of the grievance process through
information and outreach materials.
5. Applicant accepts grievances from enrollees at least by telephone and in
writing (including facsimile).
6. Applicant maintains, and provides to CMS upon request, records on all
grievances received both orally and in writing. At a minimum, such
records must track the:
Date of receipt of the grievance
Mode of receipt of grievance (i.e. fax, telephone, letter, etc.)
Person who filed the grievance

Yes

No

Subject of the grievance
Final disposition of the grievance
Date the enrollee was notified of the disposition
Note: A grievance is any complaint or dispute, other than one that involves a coverage
determination, expressing dissatisfaction with any aspect of a Part D 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
Part D 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.

3.8. Coverage Determinations (including Exceptions) and Appeals
42 CFR Part 423 Subpart M; Prescription Drug Benefit Manual,
Chapter 18; Part D QIC Reconsideration Procedures Manual
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:
1. Applicant processes beneficiary coverage determinations (including
exceptions) and appeals consistent with 42 CFR Part 423 subpart M and
relevant provisions of subpart U.
2. Applicant uses a uniform exceptions and appeals process, including
procedures for accepting oral and written requests for coverage
determinations and redeterminations per § 423.128(b)(7) and (d)(1)(iii).
Applicant ensures access to a uniform model form to request a coverage
determination and redetermination, to the extent such model forms have
been approved for use by CMS. Applicant provides immediate access to
the coverage determination and redetermination processes via an Internet
Website.
3. Applicant employs a medical director who is a physician with a current
and unrestricted license to practice medicine in a State, Territory,
Commonwealth of the United States, or the District of Columbia, per the
requirements set forth in § 423.562(a)(5). The medical director is
responsible for ensuring the clinical accuracy of all coverage
determinations and redeterminations involving medical necessity.

Yes

No

4. Applicant retains the services of physicians or other appropriate health
care professionals per the requirements in 423.566(d) for medical
necessity reviews in cases where the applicant expects to issue a partially
or fully adverse coverage determination.
5. Applicant abides by the coverage determination and appeals policies
contained in Chapter 18 of the Prescription Drug Benefit Manual and the
Part D QIC Reconsideration Procedures Manual.
6. Applicant has arrangements with its network pharmacies for the
standardized pharmacy notice (―Notice: Your Prescription Cannot be
Filled‖/CMS-10147) to be distributed to enrollees in accordance with the
requirements set out in 42 CFR §§423.562 (a)(3) and 423.128(b)(7)(iii).
7. Applicant, in accordance with 42 CFR Part 423 subpart M:
Tracks coverage determination (including exceptions) and
redetermination requests received both orally and in writing,
Processes coverage determinations (including exceptions) and
redeterminations within the appropriate timeframes,
Provides appropriate and timely notification to enrollees (and prescribing
physicians or other prescribers, when appropriate) of coverage
determination (including exceptions) and redetermination decisions, and
Trains relevant staff and first tier, downstream and related entities on all
regulatory requirements.
8. At a minimum, Applicant must track the:
Date and time of receipt of a coverage determination request (including
an exception request) or redetermination request,
Mode of receipt (i.e. fax, telephone, letter, etc.),
Person who filed the request,
Type of request made (i.e., standard or expedited),
Date and time of receipt of a physician's or other prescriber‘s supporting
statement (for an exception request),
Disposition of request, and
Date and time of decision notice to the enrollee and/or prescriber.
9. Applicant notifies the enrollee (and the prescribing physician or other
prescriber involved, as appropriate) of an expedited coverage
determination for benefits as expeditiously as the enrollee‘s health
condition requires, but no later than 24 hours after receipt of the request.

10. Applicant ensures that an enrollee is notified of a standard coverage
determination for benefits as expeditiously as the enrollee‘s health
condition requires, but no later than 72 hours after receipt of the request.
11. Applicant ensures that an enrollee is notified of a standard coverage
determination regarding reimbursement and receives reimbursement
(when appropriate) no later than 14 calendar days after receipt of the
request.
12. Applicant ensures that an enrollee is notified of a decision on an
exception request in accordance with regulatory timelines applicable to
coverage determinations. For exceptions involving requests for benefits,
the processing timeframe begins upon receipt of the physician's or other
prescriber‘s supporting statement. For exceptions involving requests for
payment, the processing timeframe begins upon receipt of the request for
payment.
13. Applicant notifies the enrollee (and the prescribing physician or other
prescriber involved, as appropriate) of an expedited redetermination as
expeditiously as the enrollee‘s health condition requires, but no later than
72 hours after receipt of the request.
14. Applicant ensures that an enrollee is notified of standard
redeterminations as expeditiously as the enrollee‘s health condition
requires, but no later than 7 calendar days after receipt of the request.
15. Applicant automatically forwards coverage determination (including
exception) and redetermination requests to the Independent Review
Entity (IRE) when the notification timeframes are not met, consistent with
the rules set forth in Chapter 18 of the Medicare Prescription Drug Benefit
Manual. Applicant auto-forwards cases timely to the proper IRE filing
location and notifies the enrollee that the case has been sent to the IRE.
16. Applicant maintains an exceptions process that includes a written
description of how the organization will provide for standard and
expedited tiering exception requests and non-formulary exception
requests (including exceptions to utilization management tools), and how
the organization will comply with such description. Such policies and
procedures will be made available to CMS on request.
17. Applicant complies with 42 CFR §423.578(a) and (b) which require a
PDP sponsor to:
Grant a tiering or non-formulary exception (including an exception to a
utilization management tool) when it is medically appropriate to do so, and
Provide the criteria for evaluating whether approval is appropriate.

These requirements also apply to exceptions requests by Medicare eligible
children for off-formulary Part D pediatric drugs and doses that are medically
appropriate.
18. Applicant‘s exceptions process is not overly burdensome or onerous. For
example, a Part D Sponsor may not require that ALL exception requests
be accompanied by laboratory evidence.
19. Applicant‘s approved non-formulary drugs are assigned to a single
existing tier, unless Applicant elects to apply a second less expensive
level of cost sharing for approved formulary exceptions for generic drugs,
so long as the second level of cost sharing is associated with an existing
formulary tier and is applied uniformly to all approved formulary
exceptions for generic drugs. Applicant may not create a tier specifically
designed for non-formulary exceptions.
20. Applicant does not restrict the number of exception requests submitted by
an enrollee.
21. Applicant will:
Timely effectuate favorable decisions issued by the IRE, an Administrative
Law Judge, the Medicare Appeals Council, or a federal court, and
Timely notify the IRE when a favorable decision has been effectuated.
22. Applicant will timely forward case files to the IRE (upon request by the
IRE) when an enrollee requests a reconsideration by the IRE and will
prepare and submit the case file consistent with instructions in the Part D
QIC‘s Reconsideration Procedures Manual.
23. Applicant informs its enrollees about the coverage determination
(including exceptions) and appeals process through information provided
in the Evidence of Coverage and outreach materials.
24. Applicant makes available to CMS upon request, coverage determination
(including exceptions) and appeals records and is able to track all levels
of appeal by the appeal number assigned by the adjudicator (e.g., IRE).

3.9. Coordination of Benefits 42 CFR Part 423 Subpart J;
Prescription Drug Benefit Manual, Chapter 14
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:

Requesting
Waiver?
Yes

No

Yes or No

1. Applicant complies with Chapter 14 of the Prescription
Drug Benefit Manual.
2. Applicant has a system for notifying enrollees when CMS‘
systems indicate other prescription drug coverage, and
requesting enrollees to concur with new/changed
information.
3. Applicant permits SPAPs, ADAPs, IHS, and other third
party payers to coordinate benefits as required by the
regulations in 42 CFR Part 423, Subpart J, and Chapter 14
of the Prescription Drug Benefit Manual. For example, an
SPAP may require agreements be signed in order for the
state to pay premiums on behalf of a beneficiary. CMS
expects Part D sponsors to execute these trading partner
agreements within a reasonable timeframe.
4. Applicant pays user fees as required under 42 CFR §423.6
and as may be required under 42 CFR §423.464 (c).
5. Applicant does not impose fees on SPAPs or other thirdparty insurers that are unreasonable and/or unrelated to
the cost of coordination of benefits.
6. Applicant sends updated information captured in the
beneficiary COB notification process about its enrollees‘
other sources of prescription drug coverage via electronic
updates to the COB contractor.
7. Applicant agrees to receive COB files from CMS and
update its systems with these data at least weekly in
accordance with the most current version of the Plan
Communications User Guide.
8. When a supplemental payer wishes to pay premiums on
behalf of plan enrollees, Applicant:
As may be required by a supplemental payer, enters into
agreements with, and accept premium payments made by
these supplemental payers;
Suppresses premium billing to the beneficiaries for whom it
accepts premium payments from supplemental payers;
Informs enrollees not to use the SSA withhold when
another payer is paying their premium (in whole or in part);
and
Ensures that, the overall premium payment made by or on

behalf of a beneficiary does not vary among plan enrollees
(e.g., Sponsor cannot charge a different premium to
SPAPs for their members versus all other enrollees).
9. If Applicant agrees to enter into an agreement with SPAPs,
accepting a risk-based, per capita amount to administer a
wrap-around benefit on behalf of the beneficiary, the
Applicant must follow the requirements set forth in Chapter
14 of the Prescription Drug Beneft Manual.
10. When the Applicant‘s service area includes States that
subsidize a portion of beneficiary cost-sharing through their
SPAPs through a non-risk lump-sum contract with
reconciliation, Applicant:
Enters into an agreement to receive such subsidies;
Applies such subsidies to the first dollar of beneficiary cost
sharing under the Applicant‘s Part D plan; and
Submits claims information to the State to support
reconciliation.
11. Applicant provides clear and prominently displayed
information identifying the SPAP as a co-sponsor of
benefits when the Applicant participates in a risk- or nonrisk lump sum per capita contract with an SPAP to provide
wrap-around benefits to Part D enrollees.
12. Applicant receives and processes plan to plan
reconciliation reports on a monthly basis.
13. Applicant coordinates the reconciliation of claims when a
Part D sponsor other than the Part D sponsor of record
paid claims or when a non-Part D payer (e.g., SPAP) paid
claims and should not have paid at all or paid out of the
correct payer order in accordance with Chapter 14 of the
Prescription Drug Benefit Manual.
14. Applicant coordinates benefits with SPAPs, other entities
providing prescription drug coverage, beneficiaries, and
others paying on the beneficiaries‘ behalf for a period not
to exceed three years from the date on which the
prescription for a covered Part D drug was filled.

3.10. Tracking Out-of Pocket Costs (TrOOP) Affordable Care Act §
3314; 42 CFR Part 423 Subpart J; Prescription Drug Benefit
Manual, Chapters 13 and Chapter 14
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:
1. Applicant tracks each enrollee‘s true out of pocket
(TrOOP) costs reflecting the amount the enrollee has
spent out of pocket during a program year on covered
Part D drugs.
2. Applicant accepts data concerning third party payers in
a format specified by CMS and uses these data in the
Applicant‘s TrOOP calculation process.
3. Applicant processes claims and tracks TrOOP in real
time using the current HIPAA-approved NCPDP
standard.
4. Applicant provides enrollees with a report on their
TrOOP status at least monthly if the enrollee‘s TrOOP
status has changed.
5. Applicant provides enrollees daily access to their current
TrOOP status through the organization‘s toll-free
customer service phone number.
6. In the event of disenrollment, Applicant provides the
TrOOP status of the beneficiary as of the effective date
of the disenrollment to the beneficiary, if there has been
a change in these data since the last report to the
beneficiary.
7. Applicant retroactively adjusts claims and recalculates
TrOOP balances based on Nx transactions received
from the TrOOP Facilitation Contractor that were
created based on other than real-time TrOOP-eligible
claims.
8. Applicant retroactively adjusts claims and recalculates
TrOOP balances based on receipts received from its

Requesting
Waiver?
Yes

No

Yes or No

Medicare enrollees that reflect amounts the enrollee
paid on other than real-time TrOOP-eligible claims.
9. Applicant agrees that when it receives an Nx
transaction, but has no supplemental payer information
on file to identify the payer, the Applicant contacts the
beneficiary to identify the payer and sends the payer
information to the COB Contractor via ECRS
verification.
10. Applicant retroactively adjusts claims, recalculates
TrOOP balances, and reimburses other payers (when
applicable) whenever it receives information (e.g., an
LIS status change) that affects how the Applicant
previously adjudicated a claim, or that indicates an error
in the order of payment when another payer(s) was
involved.
11. Applicant may count other payer paid amounts as
satisfying the Part D deductible whether or not the entire
amount counts toward TrOOP.
12. Applicant has the systems capability to receive and
respond to real-time (or batch) transactions requesting
TrOOP-related data for disenrolling Part D beneficiaries
as well as to receive these data for newly enrolling Part
D beneficiaries transferring mid-year from another plan.
13. Applicant agrees that, when an exception to the ATBT
process is required, the Applicant sends TrOOP-related
data manually for disenrolling Part D beneficiaries as
well as receives these data manually for newly enrolling
Part D beneficiaries transferring mid-year from another
plan.
14. Applicant has the capacity to integrate data received via
electronic transactions (as well as data received
manually when the exception process is required) into
those systems that track and apply beneficiary-level
TrOOP and gross covered prescription drug costs.
15. Applicant treats costs incurred by AIDS Drug Assistance
Programs and Indian Health Services in providing
prescription drugs toward the annual out-of-pocket
threshold.

NOTE: For information regarding the TrOOP facilitator, Applicant may link to
http://medifacd.ndchealth.com/home/medifacd_home.htm

3.11. Medicare Secondary Payer 42 CFR §423.462; Prescription Drug
Benefit Manual, Chapter 14
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:

Requesting
Waiver?
Yes

No

Yes or No

1. Applicant is familiar with rules that determine when other
payers are primary or secondary to Medicare as
referenced in 42 CFR §423.462.
2. Applicant adheres to MSP laws and any other Federal
and State laws in establishing payers of last resort.
3. Applicant follows the Rules for Coordination of Benefits
adopted in the most current National Association of
Insurance Commissioner Coordination of Benefits Model
Regulation.
4. Applicant processes claims in real time to support the
TrOOP facilitation process when it is a secondary payer
in accordance with the application of MSP rules.
5. Applicant collects mistaken primary payment from
insurers, group health plans, employer sponsors,
enrollees and other entities.
6. Applicant agrees that in situations involving workers‘
compensation, Black Lung, No-Fault, or Liability
coverage to make conditional primary payment and
recover any mistaken payments, unless the Applicant is
already aware that the enrollee has workers‘
compensation, Black Lung, No-Fault, or Liability
coverage and has previously established that a certain
drug is being used exclusively to treat a related injury.

3.12. Marketing/Beneficiary Communications 42 CFR §423.128; 42
CFR §423.505; Prescription Drug Benefit Manual, Chapter 2
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:
1. Applicant complies with marketing guidelines and
approval procedures that are contained with Chapter 2 of
the Prescription Drug Benefit Manual and posted on the
www.cms.gov/ website, including the requirements of the
File and Use Certification process.
2. Applicant makes available to beneficiaries only those
marketing materials, notices, and other standardized
letters that comply with CMS‘ marketing guidelines and
have been appropriately filed with CMS through HPMS.
3. Annually and at the time of enrollment, the Applicant
provides enrollees information about the following Part D
features, as described in the marketing guidelines:
Enrollment and Disenrollment Procedures
Beneficiary Procedural Rights
Potential for Contract Termination
Benefits
Types of Pharmacies in the Pharmacy Network
Out-of-network Pharmacy Access
Formulary
Premiums and cost-sharing
Service Area
Plan ratings information
4. Applicant provides general coverage information, as well
as information concerning utilization, grievances,
appeals, exceptions, quality assurance, and sponsor
financial information to any beneficiary upon request.
5. Applicant discloses to its enrollees and potential
enrollees information concerning the organization‘s
performance and contract compliance deficiencies as
described by CMS.
6. Applicant makes marketing materials available in any
language that is the primary language of at least 5% of

Requesting
Waiver?

Yes or No

Yes

No

the general population in an Applicant‘s plan benefit
package service area.
7. Applicant maintains a toll-free customer service call
center that provides customer telephone service to
current and prospective enrollees in compliance with
CMS standards. This means that the Applicant complies
with at least the following:
Call center operates during normal business hours,
seven days a week from 8:00 AM to 8:00 PM for all time
zones in which the Applicant offers a Part D plan during
the annual enrollment period and 45 days thereafter.
On Saturdays, Sundays and holidays, from February 15
until the following annual enrollment period, a customer
service representative or an automated phone system
may answer beneficiary calls.
If a beneficiary is required to leave a message in voice
mail box due to the utilization of an automated phone
system, the applicant ensures that a return call to a
beneficiary is made in a timely manner, but no later than
one business day from the leaving of the message by the
beneficiary.
The average hold time for a beneficiary to reach a
customer service representative is two minutes or less.
The disconnect rate of all incoming customer calls does
not exceed 5 percent.
Call center provides thorough information about the Part
D benefit plan, including co-payments, deductibles, and
network pharmacies.
Call center features an explicit process for handling
customer complaints.
Call center provides service to non-English speaking,
limited English proficient (LEP), and hearing impaired
beneficiaries.
8. Applicant operates an Internet Web site that includes all
items identified in Chapter 2 of the Prescription Drug
Benefit Manual and 42 CFR §423.505..
9. Applicant ensures that the marketed and adjudicated
formularies are consistent with the HPMS approved
formulary file.

10. Applicant provides its plan enrollees, in a form
understandable to enrollees and on at least a monthly
basis for those months in which the enrollees use their
Part D benefits, an explanation of benefits that states a)
the item or service for which payment was made; b)
notice of the enrollee‘s right to an itemized statement; c)
a year-to-date statement of the total Part D benefits
provided in relation to deductibles, coverage limits, and
annual out-of-pocket thresholds; d) cumulative year-todate total of incurred costs; and e) applicable formulary
changes.
11. Applicant does not include co-branding names and/or
logos of contracted providers or names and/or logos that
are substantially similar to a contracted provider‘s name
and/or logo on member identification cards.
12. Applicant agrees that the subsequent CY Annual Notice
of Change (ANOC) / Summary of Benefits (SB) /
Formulary must be received by members (if applicable)
no later than 15 days prior to the start of the annual
election period.
13. Applicant notifies its enrollees that the Applicant will
release the enrollee‘s information, including the
enrollee‘s prescription drug event data, to CMS which
may release it for research and other purposes
consistent with all applicable Federal statutes and
regulations.
14. Applicant provides initial and renewal compensation to a
broker or agent for the sale of a Medicare health plan
with prescription drug coverage consistent with CMSestablished requirements in 42 CFR §422.2274 and 42
CFR §423.2274.
15. Applicant ensures that brokers and agents selling
Medicare products are trained and tested on Medicare
rules and the specifics of the plans they are selling, and
that they pass with a minimum score as specified in CMS
guidance.
Note: While Cost Plan sponsors have to meet the Part D marketing guidelines, the
CMS review process will be integrated in the Part C Review required under 42 CFR §
417.428.

3.13. Provider Communications Prescription Drug Benefit Manual,
Chapter 2
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:
1. Applicant operates a toll-free call center to respond to
inquiries from pharmacies and providers regarding the
Applicant‘s Medicare prescription drug benefit. Inquiries
will concern such operational areas as claims processing,
benefit coverage, claims submission, and claims payment.
This means that the Applicant complies with at least the
following:
Be available 24 hours a day when the pharmacy network
includes pharmacies that are open 24 hours a day;
The average hold time for a pharmacist to reach a
customer service representative is two minutes or less.
The disconnect rate of all incoming calls does not exceed 5
percent.
2. Applicant agrees that it has a ―one-stop‖ area on its website
that provides needed information on the procedures, the
forms and the contact information for their prior
authorization, coverage determination (including
exceptions), and appeals processes.
3. Applicant operates a toll-free call center to respond to
physicians and other prescribers for information related to
prior authorizations, coverage determinations (including
exceptions), and appeal requests. The call center operates
during normal business hours and never less than 8:00
a.m. to 6:00 p.m., Monday through Friday according to the
time zones for the regions in which their plans operate.
Applicant may use voicemail provided the message:
Indicates that the mailbox is secure.
Lists the information that must be provided so the case can
be worked (e.g., provider identification, beneficiary
identification, type of request (coverage determination,
exception, or appeal), and whether the request is an

Requesting
Waiver?

Yes or No

Yes

No

expedited or standard request).
For coverage determination (including exception) requests:
articulates and follows a process for resolution within 24
hours of call for expedited requests, or 72 hours for
standard requests.
For appeal requests: articulates and follows a process for
resolution within 72 hours for expedited appeals, and 7
calendar days for standard appeals.
Provides and follows a process for immediate access in
situations where an enrollee‘s life or health is in serious
jeopardy.

3.14. Reporting Requirements Affordable Care Act § 6005; 42 CFR
§423.514; 2010 Reporting Requirements
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
1. Applicant complies with the Reporting Requirements
Guidance that is posted on the www.cms.gov/ website.
2. Applicant agrees that an individual with authority to sign on
behalf of your organization attests that the reporting
requirements data has been audited internally for accuracy.
3. Applicant subjects reporting requirement data to a yearly
independent audit to determine its reliability, validity,
completeness, and comparability in accordance with CMS
guidance.
Business Transactions and Financial Requirements
4. Applicant reports, consistent with 42 CFR §423.514(b),
information related to significant business transactions
between the Part D plan sponsor and a party in interest
within 120 days of the end of each fiscal year. This
qualification includes combined financial statements, where
required under 42 CFR §423.514(b)(2).

Requesting
Waiver?

Yes or No

5. Applicant notifies CMS of any loans or other special
financial arrangements made with contractors, first tier,
downstream and related entities as that term is defined in
42 CFR §423.501.
6. Applicant submits audited financial statements to CMS
annually.
Claims Data
7. The Applicant or the Applicant‘s representative, such as a
first tier, downstream, or related entity, has data
management processes and data systems capable of
collecting, storing and protecting electronic eligibility and
claims data. Data to be collected encompasses quantity,
type, and costs of pharmaceutical prescriptions filled for
enrollees. The plan must link this information to Medicare
beneficiary identification numbers (HIC#s).
8. The Applicant or the Applicant‘s representative, such as a
first tier, downstream, or related entity, has data
management processes and data systems capable of
creating and submitting PDE records for Medicare enrollees
for every Part D drug prescription in the format required by
CMS, using batch submission processes. Data to be
submitted encompasses quantity, type and costs of
pharmaceutical prescriptions filled for enrollees. The plan
must link this information to Medicare beneficiary
identification numbers (HIC#s).
9. The Applicant or the Applicant‘s representative, such as a
first tier, downstream, or related entity, has data
management processes and data systems capable of
submitting data to CMS via the Medicare Data
Communications Network (MDCN).
10. The Applicant or the Applicant‘s representative, such as a
first tier, downstream, or related entity, has data
management processes and data systems capable of
performing data edit and quality control procedures
(including resolution of rejected claims) to ensure accurate
and complete prescription drug data.
11. The Applicant or the Applicant‘s representative, such as a
first tier, downstream, or related entity, has data
management processes and data systems capable of

correcting all data errors identified by CMS.
12. The Applicant or the Applicant‘s representative, such as a
first tier, downstream, or related entity, has data
management processes and data systems capable of
collecting data for dates of service within the coverage year
with a 3-month closeout window for the submission of
remaining unreported claims data.
13. The Applicant or the Applicant‘s representative, such as a
first tier, downstream, or related entity, has data
management processes and data systems capable of
providing additional information for the purposes of
reconciliation of risk factors, low income subsidy payments,
reinsurance payments, and risk corridor as required by
CMS.
Rebate Data
14. The Applicant reports direct and indirect remuneration
(DIR) dollars for payment reconciliation on an annual basis
at the Plan Benefit Package (PBP) level/plan level in the
manner specified by CMS. In addition, the Applicant
maintains records and documentation to verify the DIR data
reported to CMS.
Other Data
15. Applicant reports at a frequency determined by CMS
specified data (pursuant to 42 CFR §423.514(a)) on a
variety of measures to support payment, program integrity,
program management, and quality improvement activities in
a manner prescribed by CMS. Such data submissions will
be accurate and timely.
16. The Applicant provides CMS with routine administrative
reports (pursuant to 42 CFR §423.514 (a)) on a variety of
measures that concern the Applicant‘s performance in the
administration of the Part D benefit. Such reports shall be
submitted according to instructions issued with timely notice
by CMS.
Supporting www.medicare.gov
17. The Applicant submits pricing and pharmacy network
information to be publicly reported on www.medicare.gov in
order to provide Medicare beneficiaries with necessary

information regarding prescription drug costs under the
respective plans. Details regarding this data requirement
are posted on www.cms.gov by April of the prior year.
Conflict of Interest
18. The Applicant provides financial and organizational conflict
of interest reports to CMS.
PBM Transparency
19. The Applicant‘s PBM provides information related to PBM
transparency as specified in Section 6005 of the Affordable
Care Act.

3.15. Data Exchange between Part D Sponsor and CMS 42 CFR
§423.505(c) and (k)
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:
HPMS
1. Applicant uses 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
sponsors are required to secure access to HPMS in order
to carry out these functions.
Enrollment & Payment
2. Applicant establishes connectivity to CMS as noted in the
instructions provided by the MAPD Help Desk at 1-800-9278069 or via the MAPD HelpDesk webpage,
www.cms.gov/mapdhelpdesk, in the Plan Reference Guide
for CMS Part C/D Systems link.
3. Applicant submits enrollment, disenrollment and change
transactions to communicate membership information to
CMS within the timeframes provided by CMS.
4. Applicant reconciles Part D data to CMS

Requesting
Waiver?
Yes

No

Yes or No

enrollment/payment reports received daily, weekly and
monthly.
5. Applicant completes the review of monthly reports,
including submitting all requests for discrepancy
corrections, and submits the CEO Certification of
enrollment data for plan payment within 45 days of CMS
monthly membership payment report availability.
6. Applicant participates in connectivity testing and other
system testing measures as provided to the Applicants prior
to contract execution to validate system setup.
7. Applicant has system(s) to process enrollment and payment
transactions as exchanged with CMS in accordance with
system development lifecycle standards.
8. Applicant ensures appropriate security safeguards and
protocols are in place to protect the protected health
information in the system(s).
9. Applicant maintains all pertinent system security and
disaster recovery plans and procedures.
10. In accordance with 42 CFR §423.322, the Applicant
provides CMS with any data required to ensure accurate
prospective, interim, and/or final reconciled payments
including, but not limited to, the following: test data,
Prescription Drug Event (PDE) records, enrollment
transactions, Direct and Indirect Remuneration (DIR) data,
discrepancy records, and premium payment data.

3.16. Health Insurance Portability and Accountability Act of 1996
(HIPAA), Health Information Technology for Economic and Clinical
Health Act (HITECH), and Related CMS Requirements 45 CFR Parts
160, 162, and 164; CMS issued guidance 08/15/2006 and 08/26/08
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:
1. Applicant complies with all applicable standards,
implementation specifications, and requirements in the
Standards for Privacy of Individually Identifiable Health

Requesting
Waiver?
Yes

No

Yes or No

Information, and Security Standards under 45 CFR Parts
160, 162, and 164.
2. Applicant encrypts all hard drives or other storage media
within the device as well as all removable media.
3. Applicant has policies addressing the secure handling of
portable media that is accessed or used by the
organization.
4. Applicant complies with all applicable standards,
implementation specifications, and requirements in the
Standard Unique Health Identifier for Health Care Providers
final rule under 45 CFR Parts 160 and 162.
5. Applicant agrees that when its organization receives a
National Provider Identifier (NPI) in prescription drug event
data, that the organization must report an NPI.
6. Applicant agrees to implement a contingency plan related
to compliance with the NPI provisions.
7. Applicant complies with all applicable standards,
implementation specifications, and requirements in the
Standards for Electronic Transactions under 45 CFR Parts
160 and 162.
8. Applicant transmits payment and remittance advice
consistent with the HIPAA-adopted ACS X12N 835, Version
4010/4010A1: Health Care Claim Payment and Remittance
Advice Implementation Guide (―835‖).
9. Applicant submits the Offshore Subcontract Information and
Attestation via HPMS for each offshore subcontractor (first
tier, downstream and related entities) (including
downstream offshore subcontractors‘ first tier, downstream
and related entities) that receive, process, transfer, handle,
store, or access Medicare beneficiary protected health
information (PHI) by the last Friday in September for the
upcoming contract year.

3.17. Prohibition on Use of SSN or Medicare ID number on Enrollee ID
Cards Prescription Drug Benefit Manual, Chapter 2
A. In HPMS, complete the table below:
Applicant must attest ‗yes‘ to each of the following

Requesting

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:

Waiver?
Yes

No

Yes or No

1. Applicant does not use an enrollee‘s Social Security
Number (SSN) or Medicare ID Number on the enrollee‘s
identification card.

3.18. Record Retention 42 CFR §423.505(d)
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:

Requesting
Waiver?

Yes or No
Yes

No

1. The Applicant maintains books, records, documents, and
other evidence of accounting procedures and practices
consistent with 42 CFR §423.505(d).
2. Applicant has pharmacies, contracted for the Part D benefit,
maintain prescription records in their original format for the
greater of 3 years or the period required by State law and
allow those records to be transferred to an electronic format
that replicates the original prescription for the remaining 7
years of the 10 year record retention requirement.
3. Applicant keeps all other records—except prescription
records—that must be retained for Medicare under Part C
and Part D in the format(s) required by State law or at the
Applicant‘s discretion.

3.19. Prescription Drug Event (PDE) Records; 42 CFR Part 423
Subpart G; CMS issued guidance 04/27/2006, 06/23/2006,
12/17/20101, 03/01/2011, 03/04/2011, 04/28/2011, 05/16/2011
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:
1. Applicant abides by CMS guidance related to PDE data. Such guidance
includes the 2008 Regional Prescription Drug Event Data Participant
Training Guide and Technical Assistance Resource Guide which can be
found at www.csscoperations.com/new/pdic/pdd-training/pdd-

Yes

No

training.html.
2. Applicant submits data and information necessary for CMS to carry out
payment provisions.
3. Applicant submits PDE data on the schedule required by applicable
regulations and CMS guidance.
4. Applicant submits the PDE data in the format described by CMS and in
accordance with the National Council for Prescription Drug Programs
(NCPDP) industry standard format.
5. Applicant meets all data submission deadlines.
6. Applicant pays all Plan-to-Plan payables on time.
7. Applicant complies with Medicare Coverage Gap Discount Program
requirements.
8. Applicant complies with timely response requirements for PDE Data
Quality Reviews posted on the Data Quality Validation website.

3.20. Claims Processing; 42 CFR §423.120(c)(4); 42 CFR §423.466;
CMS issued guidance 04/26/2006, 01/13/2010, and 03/29/2010
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:
1. Applicant has an on-line claims processing system that
operates in real time to ensure accurate and timely
payment of all claims submitted by network pharmacies on
behalf of Part D plan enrollees. System operates according
to the following standards:
98% response within 4 seconds;
99% of all claims paid with no errors;
99% system availability.
2. Applicant has a system designed to:
Pay non-electronic claims submissions from network
pharmacies in accordance with 42 CFR §423.520; and
Pay requests for reimbursement from beneficiaries in

Requesting
Waiver?

Yes or No

Yes

No

accordance with 42 CFR §423.568(b).
3. Applicant has available for CMS inspection a complete
description of your claims adjudication system including:
Hardware and software;
Operating system;
Commercial organization from which Applicant receives
pricing files, including file revision history;
Number of sites processing claims (including disaster
recovery back-up system);
System volume in covered lives, including the number of
transactions the system can support per day and per hour.
4. Applicant has available to CMS upon request policies and
procedures that include a complete description and flow
chart detailing the claims adjudication process for each:
Contracted network pharmacies;
Paper claims;
Out-of-network pharmacy claims submitted by
beneficiaries;
Non-electronic claims submitted by network pharmacies,
and other payers seeking to coordinate benefits;
Batch-processed claims; and
Manual claim entry (e.g. for processing direct member
reimbursement).
5. Applicant has available to CMS upon request policies and
procedures that include a complete description of claim
detail management, including:
The length of time that detailed claim information is
maintained online (not less than 12 months);
The data storage process after it is no longer online; and
The length of time that detailed claim information is stored
when it is no longer online (not less than 10 years).
6. Applicant has available to CMS upon request policies and
procedures that include a complete description of the
accessibility of this information for data capture purposes
and flow chart of the claims data retrieval process for each:

Entire claims history file;
File claims adjustments including records of
reimbursements and recoveries due to network pharmacies
and beneficiaries; and
Deductible files/TrOOP/ and gross covered prescription
drug cost accumulator.
7. Applicant has a robust testing process that will identify and
correct any plan configuration errors prior to
implementation.
8. Applicant uses HIPAA compliant transactions where
applicable.
9. Applicant documents the manner and extent to which it has
tested benefit designs such as drug exclusions or quantity
limitations and plan parameters such as co-payments and
benefit intervals (phases).
10. Applicant rapidly adopts any new messaging approved by
the NCPDP Workgroup to adjudicate a Part D claim and
appropriately coordinate benefits in real time.
11. Applicant regularly updates their systems with the most
current information on sanctioned providers and has
processes in place to identify and prevent payment of Part
D claims at point-of-sale when such claims have been
prescribed by excluded providers.
12. Applicant assigns and exclusively uses unique Part D
identifiers (RxBin or RxBin/RxPCN) for each individual Part
D member.
13. Applicant agrees when it receives information that
necessitates a retroactive claims adjustment, the applicant
processes the adjustment and issues refunds or recovery
notices within 45 days of the applicant‘s receipt of complete
information regarding the claims adjustment.

3.21. Premium Billing 42 CFR §423.293; CMS issued guidance
03/08/2007
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

Requesting
Waiver?

‗yes‘ or ‗no‘ to each of the following qualifications by
clicking on the appropriate response in HPMS:

Yes or No
Yes

No

1. Applicant takes steps to ensure that members are not over
billed or double billed for their monthly premiums. The
Applicant will promptly refund members when billing errors
occur.
2. Applicant agrees it cannot prevent excessive billing when a
member exercises their right to have Social Security
withholding and has a secondary payer (e.g., SPAP) paying
part of their premium. In such cases the Applicant promptly
reimburses members for overpayments.
3. Applicant does not direct bill a member when the member
is already in Premium Withholding status until the status
change with both CMS and SSA has been confirmed.
4. Applicant agrees that when a member is in Premium
Withholding status and the withheld amount has not been
issued by CMS in the monthly plan payments, the Applicant
resolves the matter with CMS not with the member.

3.22. Consumer Assessment of Healthcare Providers and Systems
(CAHPS) Survey Administration 42 CFR §423.156
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:
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.
2. Applicant agrees to abide by CMS guidance to the process
for contracting with approved CAHPS survey vendors.

Yes

No

Requesting
Waiver?

Yes or No

Upload in HPMS, in a .pdf format, the following certification:

4. CERTIFICATION
I,

, attest to the following:
(NAME & TITLE)

1. 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.
2. 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.
3. I agree that if my organization meets the minimum qualifications and is Medicareapproved, 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.
4. 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.
5. 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.
6. 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.
7. 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)

Authorized Representative Signature

Title

Date (MM/DD/YYYY)

5. APPENDICES

APPENDIX I – 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)

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 and operated by the Cost
contractor if that organization‘s
pharmacy network access meets the
CMS convenient access standards .
{Note: Applicants will be expected to
provide comparable information in the
application for organizational
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 and operated by the Cost
contractor and dispense at least 98% of
all prescriptions through pharmacies
owned and operated by Applicant.

Waiver applies
only to Cost
contractors that
operate their own
pharmacies

42 CFR
§423.120(a)(8)(i)
Waiver applies
only to Cost
contractors that
operate their own
pharmacies

APPENDIX II—Attestation for Cost Plan Employer/Union-Only Group
Waiver Plans (800-Series)
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 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 2013 Solicitation for Applications for New Prescription
Drug Plans (PDP) Sponsors, comprises the entire ―800 series‖ EGWP application for PDP
Sponsor. All provisions of the 2013 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 2013 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 appendix comprises the entire ―800 series‖ EGWP application
for PDP Sponsor. All provisions of the PDP Sponsor‘s existing contract with CMS 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.

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 must
complete the underlying 2013 Solicitation for Applications for New Prescription
Drug Plans (PDP) Sponsors in addition to this appendix.
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 must be
licensed in at least one state. (Section 3.1.2B)
Applicant understands and agrees that it is not required to submit a 2013 Part D
bid (i.e., bid pricing tool) to offer its employer/union-only group waiver plans.
(Section 3.2.6A1)
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 2013 Solicitation for Applications
for New Prescription Drug Plan (PDP) Sponsors, it submits retail pharmacy lists

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)
PDP Sponsor Applicants applying to offer employer/union-only group waiver
plans and plans to individual beneficiaries understand and agree that they are
not initially required to have networks in place for those designated EGWP
service areas outside of their individual plan service areas or submit retail
pharmacy 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)
2) 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 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)
3) 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)
4) Applicant understands that its employer/union-only group waiver PDPs are not 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)
5) Applicant understands that its employer/union-only group waiver plans are not 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 Plan Finder. (Sections 3.7A and
3.16A17)
6) Applicant understands that dissemination materials for its employer/union-only group waiver
PDPs are not subject to the requirements contained in 42 CFR §423.128 to be submitted for
review and approval by CMS prior to use. However, Applicant agrees to 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)
7) Applicant understands that its employer/union-only group waiver PDPs is not 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 3.13A12)
8) Applicant understands that the dissemination requirements set forth in 42 CFR §423.128 do
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
complies 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, A10)
9) Applicant understands that its employer/union-only group waiver plans is not subject to the
Part D beneficiary customer service call center hours and call center performance
requirements. Applicant ensures that a sufficient mechanism is available to respond to
beneficiary inquiries and provides 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 3.13A7)
10) 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 is not available for enrollees
in Applicant‘s employer/union-only group waiver plans. (Sections 3.5A20 and 3.23A2-A4)
11) 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.
12) 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.
13) 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.
14) 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.
15) 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 comply with such guidance at the time of the application
submission date.
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.}

APPENDIX III—Direct Contract PDP Attestation
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 are 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 2013 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 must complete and submit the underlying 2013 Solicitation for Applications for
New Prescription Drug Plans (PDP) Sponsors in addition to this Appendix in its entirety.
The 2013 Solicitation for Applications for New Prescription Drug Plans (PDP) Sponsors
along with the Appendix entitled ―Part D Financial Solvency & Capital Adequacy
Documentation‖ 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

meets 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 3.1.2)
4) Applicant is not required to submit a 2013 Part D bid (i.e., bid pricing tool) to offer its Direct
Contract PDP. (Section 3.2.6A1)
5) Applicant restricts 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 does not 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 reviews the adequacy of the Applicant‘s pharmacy networks and may 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 2013
Solicitation for Applications for New Prescription Drug Plans (PDP) Sponsors, submits retail
pharmacy access and other pharmacy access submissions (mail order, home infusion, longterm 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 is not included in the processes for autoenrollment (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
provide beneficiaries the option to pay their premium through Social Security withholding.
Thus, the premium withhold option is not 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 §423.128 to be submitted for review and
approval by CMS prior to use. However, Applicant agrees to 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 is not 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 3.13A12)
12) Applicant understands that the dissemination requirements set forth in 42 CFR §423.128 do
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 complies 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, A10)
13) Applicant understands that its Direct Contract PDP is not 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 Plan Finder. (Sections 3.7A and 3.16A17)
14) Applicant understands that its Direct Contract PDP is not subject to the Part D beneficiary
customer service call center hours and call center performance requirements. Applicant has
a sufficient mechanism available to respond to beneficiary inquiries and provides 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 3.13A7)
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 modifies 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 at the time of the
application submission date.
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.}

Appendix IV—Organization Background and Structure
Instructions: Applicants must complete and upload in HPMS the following information.
A. Legal Entity Background
Date Legal Entity Established: _________________
State of Incorporation
(Applicant must upload proof of incorporation, such as articles of incorporation or a
certificate of good standing from the state of incorporation.)
B. Management of Legal Entity
Identify the staff with legal authority to sign/enter into contracts on behalf of the legal
entity
Identify all covered persons of the legal entity. ―Covered persons‖, as defined at 42
CFR §§423.507(a)(4), 423.508(f), and 423.510(e)(2), include:
All owners of nonrenewed or terminated organizations who are natural persons,
other than shareholders who have an ownership interest of less than 5 percent;
An owner of a whole or part interest in a mortgage, deed of trust, note, or other
obligation secured (in whole or in part) by the organization, or by any property or
assets thereof, which whole or part interest is equal to or exceeds 5 percent of the
total property and assets of the organization; and
A member of the board of directors or board of trustees of the entity, if the
organization is organized as a corporation.
C. Parent Organization Information
Name of Parent Organization
Date Parent Organization established
D. Organizational Charts
Provide an organizational chart of the legal entity‘s parent organization, affiliates,
subsidiaries and related entities.
Provide an organizational chart solely of the internal structure of the legal entity by
department (i.e., marketing, compliance, pharmacy network/contracting, and claims
adjudication). Do not provide the internal structure of the parent organization.

APPENDIX V—Crosswalks of Section 3.1.1D Requirements in
Subcontracts submitted as Attachments to Section 3.1.1
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

3.1.1D1

The parties to the contract

3.1.1D2

The functions to be performed by the first tier,
downstream, or related entity. 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)

3.1.1D3

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).

3.1.1D4

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)

3.1.1D5

The payment the first tier, downstream, or related entity
will receive for performance under the contract, if
applicable.

3.1.1D6

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 enrollmentrelated services must have a term beginning no later than
October 15 extending through the full contract year
ending on December 31 of the next year).

Location in
Subcontract
by Page
number and
Section

3.1.1D7

Are signed by a representative of each party with legal
authority to bind the entity.

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
§423.505(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.

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 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)

3.1.1D13

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)

3.1.1D14

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)

3.1.1D15

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)

3.1.1D16

Language that if the first tier, downstream, or related
entity will establish the pharmacy network or select
pharmacies to be included in the network and a
prescription drug pricing standard is used for
reimbursement,identifies the source used by the Part D
sponsor for the prescription drug pricing standard of
reimbursement. 42 CFR §423.505(i)(3)(viii)(B)

3.1.1D17

If the first tier, downstream, or related entity will establish
the pharmacy network or select pharmacies to be
included in the network and a prescription drug pricing
standard is used for reimbursement, a provision requiring
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)

3.1.1D18

If the first tier, downstream, or related entity will establish
the pharmacy network or select pharmacies to be
included in the network, language requiring the network
pharmacies to submit claims to the Part D sponsor or first
tier, downstream or related entity whenever the
membership ID card is presented or on file at the
pharmacy unless the enrollee expressly requests that a
particular claim not be submitted. 42 CFR §423.120(c)(3)

3.1.1D19

Language that if the first tier, downstream, or related
entity will adjudicate and process claims at the point of
sale and/or negotiate with prescription drug
manufacturers and others for rebates, discounts, or other
price concessions on prescription drugs contain language
requiring that the first tier, downstream, or related entity
will comply with the reporting requirements established in
Section 6005 of the Affordable Care Act.

APPENDIX VI – Crosswalk for Retail Pharmacy Access
Contracts
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

3.1.1D2

The functions to be performed by the first tier,
downstream, or related entity. 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 §423.505(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
§423.505(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.

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

Citation

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 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)

3.1.1D13

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)

3.1.1D15

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)

3.1.1D16

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)

3.1.1D17

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)

3.1.1D18

Language requiring the network pharmacy to submit
claims to the Part D sponsor or first tier, downstream or
related entity whenever the membership ID card is
presented or on file at the pharmacy unless the enrollee
expressly requests that a particular claim not be
submitted. 42 CFR §423.120(c)(3)

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 costsharing 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

APPENDIX VII – Crosswalk for Mail Order Pharmacy Access
Contracts
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

3.1.1D2

The functions to be performed by the first tier,
downstream, or related entity, and 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
§423.505(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
§423.505(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.

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,

Citation

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 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)

3.1.1D13

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

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)

3.1.1D17

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)

3.1.1D18

Language requiring the network pharmacy to submit
claims to the Part D sponsor or first tier,
downstream or related entity whenever the
membership ID card is presented or on file at the
pharmacy unless the enrollee expressly requests
that a particular claim not be submitted. 42 CFR

§423.120(c)(3)

3.4A3

Provisions governing submitting claims to a realtime 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

APPENDIX VII – Crosswalk for Home Infusion Pharmacy Access
Contracts
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

3.1.1D2

The functions to be performed by the first tier,
downstream, or related entity, and 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
§423.505(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
§423.505(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.

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

Citation

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 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)

3.1.1D13

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)

3.1.1D15

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)

3.1.1D16

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)

3.1.1D17

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)

3.1.1D18

Language requiring the network pharmacy to submit
claims to the Part D sponsor or first tier, downstream
or related entity whenever the membership ID card is
presented or on file at the pharmacy unless the
enrollee expressly requests that a particular claim not
be submitted. 42 CFR §423.120(c)(3)

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 a 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)

APPENDIX IX – Crosswalk for Long-Term Care Pharmacy Access
Contracts
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

3.1.1D2

The functions to be performed by the first tier, downstream, or
related entity, and 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 §423.505(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 §423.505(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

Citation

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 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)

3.1.1D13

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

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)

3.1.1D17

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)

3.1.1D18

Language requiring the network pharmacy to submit claims to
the Part D sponsor or first tier, downstream or related entity
whenever the membership ID card is presented or on file at the
pharmacy unless the enrollee expressly requests that a
particular claim not be submitted. 42 CFR 423.120(c)(3)

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
Provide that long-term care pharmacies must have not less than
30 days, nor more than 90 days, to submit to the Part D
Sponsor claims for reimbursement under the plan. 42 CFR §
423.504(b)(20)
Provisions requiring that long-term care pharmacies dispense
drugs and report information as required by 42 CFR §423.154.

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 must, at a minimum, incorporate
these criteria in ALL LTC pharmacy network contracts.
Performance and Service Criteria
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.
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 is
proficient in the NLTCP‘s processes for ordering and receiving of medications.
NLTCP must be responsible for return and/or disposal of unused medications

Citation

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.
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.
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.
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.
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.
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 inbetween 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‖.
Emergency Boxes -- NLTCPs must provide ―emergency‖ supply of
medications as required by the facility in compliance with State requirements.
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.

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.

APPENDIX X – Crosswalk for Indian Tribe and Tribal Organization,
and Urban Indian Organization (I/T/U) Pharmacy Access Contracts
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.
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

3.1.1D2

The functions to be performed by the first tier, downstream,
or related entity, and 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 §423.505(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 §423.505(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.

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

Citation

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 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)

3.1.1D13

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)

3.1.1D15

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)

3.1.1D16

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)

3.1.1D17

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)

3.1.1D18

Language requiring the network pharmacy to submit claims
to the Part D sponsor or first tier, downstream or related
entity whenever the membership ID card is presented or on
file at the pharmacy unless the enrollee expressly requests
that a particular claim not be submitted. 42 CFR
§423.120(c)(3)

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 costsharing amount. 42 CFR §423.104

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.gov/10_RxContracting_SpecialGuidance.asp#TopOfPage and all
I/T/U Contracts must contain language consistent with the model addendum that
addresses the following.
Item 1

Supersession of the addendum from underlying agreement.

Item 3

The description of the provider.

Item 4

Counting of costs paid for by provider toward any
deductibles.

Item 5

Persons eligible for services of the provider.

Item 6

The applicability of certain Federal law.

Item 7

The non-taxable status of the provider.

Item 8

Insurance and indemnification.

Item 9

Applicability of state licensing law to provider‘s employees.

Item 10

Provider eligibility for payments

Item 11

Dispute resolution.

Item 12

Federal law as the governing law.

Item 13

The contract will apply to all pharmacies and dispensaries
operated by the provider.

Item 14

The contract will not affect the provider‘s acquisition of
pharmaceuticals.

Item 15

The provider‘s point of sale processing capabilities.

Item 16

Claims processing.

Item 17

Reasonable and appropriate payment rates.

Item 18

Any information, outreach or enrollment materials prepared
by the Applicant will be supplied at no cost to the provider.

Item 19

The provider determines the hours of service for the
pharmacies or dispensaries of the provider.

Item 20

Endorsement

Item 21

Sovereign Immunity

APPENDIX XI – Applicant Submission of P&T Committee Member List
and Certification Statement
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).
I. 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.
II. 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 21, 2012. The PBM should email the P&T Committee Member
Disclosure form to the following email box: [email protected].
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.
III. PHARMACY AND THERAPEUTICS COMMITTEE MEMBER DISCLOSURE
PBM must email the following form to [email protected] by February 21,
2012.
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.

Full Name
of Member
Start Date
and End
Date

Practice/Expertise

Free of Any Conflict of Interest

Mark an „X‟ in Appropriate Column

Type Yes or No

Practicing
Physician

Practicing

Elderly/Disabled With
With
Expert
Pharmaceutical
Pharmacist
Your
Organization? Manufacturers?

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.

Organization Name

Type of Application

Contract Number(s)

Applicant must upload in HPMS:
CERTIFICATION FOR PART D SPONSORS USING A PHARMACY BENEFIT
MANAGER‘S PHARMACY& THERAPEUTICS COMMITTEE UNDER A
CONFIDENTIALITY AGREEMENT
I, attest, on behalf of LEGAL NAME OF PART D SPONSOR APPLICANT (―Applicant‖),
to the following:
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.
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.
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.
I agree that my organization has policies and procedures to ensure and confirm the
ongoing integrity, qualifications and expertise of the PBM‘s P&T Committee.
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.
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.
I certify that I am authorized to sign on behalf of the Applicant.

Part D Applicant‘s Contract Number: _____________________

__________________________
Authorized Representative Name (printed)

__________________________________
Authorized Representative Signature

___________________________
Title

___________________________
Date (MM/DD/YYYY)

APPENDIX XII – I/T/U Revised Addendum
Note: All Part D sponsors will be required to use the attached revised version of the
I/T/U Addendum.
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 supersede 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; Annual Out-of-Pocket Threshold.

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 and the annual out-of-pocket threshold 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) and (b) of the IHCIA, 25
USC §1680(a) and (b), 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(c) and in emergencies under section 813(d ) 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, 25 USC §1680c;
(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) or (b).
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;

(5)

The HIPAA and regulations at 45 CFR parts 160 and 164; and

(6)
Sec. 206(e)(3) of the IHCIA, 25 USC § 1624e(e)(3), regarding
recovery from tortfeasors.
(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; and

(4)
Sec. 206(e)(3) of the IHCIA, 25 USC §1621e(e)(3), regarding
recovery from tortfeasors, as made applicable to urban Indian organizations by
Sec. 206(i) of the IHCIA.
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. 101512, 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) Federal law (Sec. 221 of the IHCIA) provides that a pharmacist employed directly
by a Provider that is an Indian tribe or tribal organization is exempt from the licensing
requirements of the state in which the tribal health program is located, provided the
pharmacist is licensed in any state. Federal law (Sec. 408 of the IHCIA) further provides
that a health program operated by an Indian tribe or tribal organization shall be deemed to
have met a requirement for a license under state or local law if such program meets all the
applicable standards for such licensure, regardless of whether the entity obtains a license or
other documentation under such state or local law. The parties agree that these federal
laws apply to the Part D Plan Sponsor's Agreement and any addenda thereto. This
provision shall not be interpreted to alter the requirement that a pharmacy hold a license
from the Drug Enforcement Agency.
(c) To the extent that any directly hired employee of an 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. Federal law (Sec. 408 of
the IHCIA) provides that a health program operated by an urban Indian organization
shall be deemed to have met a requirement for a license under state or local law if such
program meets all the applicable standards for such licensure, regardless of whether
the entity obtains a license or other documentation under such state or local law. 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 Provider
Identifier (NPI) number.
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

Title of Authorized Representative

Printed Name of Authorized Representative

APPENDIX XII – Compliance Program Crosswalk
INSTRUCTIONS: Applicants must complete and upload in HPMS the following chart
(which contains the requirements for a Compliance Plan). Applicants must identify where
specifically (i.e., the .pdf page number) in its compliance plan the following elements are
found.
Compliance Plan Elements
A. Written policies, procedures, and standards of conduct must
include the following seven components:

Page, paragraph
where element
located
§ 423.504(b)
(4)(vi)(A)

1. Articulate the applicant‘s commitment to comply with all applicable
Federal and State standards.
2. Describe compliance expectations as embodied in the standards
of conduct.
3. Describe the implementation and operation of the compliance
program.
4. Provide guidance to employees and others on dealing with
potential compliance issues.
5. Identify how to communicate compliance issues to appropriate
compliance personnel.
6. Describe how potential compliance issues will be investigated and
resolved by the applicant.
7. Include a policy of non-intimidation and non-retaliation for good
faith participation in the compliance program, including, but not
limited to, reporting potential issues, investigating issues,
conducting self-evaluations, audits and remedial actions, and
reporting to appropriate officials.
B. Designation of a compliance officer and a compliance
committee who report directly to and are accountable to
applicant‘s chief executive or senior management and include
the following three components:
1. The compliance officer, vested with the day-to-day operations of
the compliance program, must be an employee of the MA
applicant, parent organization or corporate affiliate. The
compliance officer may not be an employee of the MA applicant‘s

§ 423.504(b)
(4)(vi)(B)

first tier, downstream or related entity.
2. The compliance officer and the compliance committee must
periodically report directly to the governing body of the MA
applicant on the activities and status of the compliance program,
including issues identified, investigated, and resolved by the
compliance program.
3. The governing body of the MA applicant must be knowledgeable
about the content and operation of the compliance program and
must exercise reasonable oversight with respect to the
implementation and effectiveness of the compliance programs.
C. Establish, implement and provide effective training and
education for employees including the chief executive and
senior administrators or managers, governing body members,
first tier, downstream, and related entities must include the
following components:

§ 423.504(b)
(4)(vi)(C)

1. Training and education must occur at least annually and must be
part of the orientation for new employees, new first tier,
downstream and related entities, and new appointments to chief
executive, senior administrator, or governing body member.
2. An indication that first tier, downstream, and related entities who
have met the fraud, waste, and abuse certification requirements
through enrollment into the Medicare program or accreditation as
a Durable Medical Equipment, Prosthetics, Orthotics, and
supplies (DMEPOS) are deemed to have met the training and
educational requirements for fraud, waste, and abuse.
D. Establishment and implementation of effective lines of
communication, ensuring confidentiality, between:

§ 423.504(b)
(4)(vi)(D)

1. The compliance officer, members of the compliance committee,
the MA applicant‘s employees, managers and governing body.
2. The MA applicant‘s first tier, downstream, and related entities.
3. Such lines of communication must be accessible to all.
4. Allow compliance issues to be reported, including a method for
anonymous and confidential good faith reporting of potential
compliance issues, as they are identified.
E. Well-publicize disciplinary standards and implementation of
procedures, which encourage good faith participation in the

§ 423.504(b)
(4)(vi)(E)

compliance program by all affected individuals, that are
enforced and include the following three policies:
1. Articulate expectations for reporting compliance issues and assist
in their resolution.
2. Identify non-compliance or unethical behavior.
3. Provide for timely, consistent, and effective enforcement of the
standards when noncompliance or unethical behavior is
determined.
F. Establish and implementation of an effective system for
routine monitoring and identification of compliance risks. The
system should include: internal monitoring and audits and, as
appropriate, external audits, to evaluate the MA applicant,
including first tier entities‘, compliance with CMS requirements
and the overall effectiveness of the compliance program.

§ 423.504(b)
(4)(vi)(F)

G. Establishment and implementation of procedures and a
system for promptly responding to compliance issues as they
are raised, investigating potential compliance problems
identified in the course of self-evaluations and audits, correcting
such problems promptly and thoroughly to reduce the potential
for recurrence, and ensure ongoing compliance with CMS
requirements. The procedures must include the following
components:

§ 423.504(b)
(4)(vi)(G)

1. If the MA applicant discovers evidence of misconduct related to
payment or delivery of items or services under the contract, it
must conduct a timely, reasonable inquiry into that conduct.
2. The MA applicant must conduct appropriate corrective actions
(e.g., repayment of overpayments and disciplinary actions against
responsible individuals) in response to the potential violation.
3. The MA applicant should have procedures to voluntarily selfreport potential fraud or misconduct related to the MA program to
CMS or its designee.


File Typeapplication/pdf
File TitleMEDICARE PRESCRIPTION DRUG BENEFIT
AuthorMarla Rothouse
File Modified2011-09-23
File Created2011-09-23

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