CMS-10137 2013 New Medicare Advantage Prescription Drug Plan (MA-P

MEDICARE PRESCRIPTION DRUG BENEFIT
Solicitation for Applications for New Medicare Advantage - Prescription Drug
Plans (MA-PD) 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 23.0 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 ..................................................................................... 7
1.1.

Purpose of Solicitation ...................................................................................... 7

1.2.

Background ....................................................................................................... 7

1.3.

Objectives and Structure ................................................................................... 7

1.4.

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

1.5.

Summary of MA-PD Sponsor Role and Responsibilities ................................. 10

1.6.

Summary of CMS Role and Responsibilities................................................... 11

1.6.1.

Application Approval, Part D Bid Review, and Contracting Processes .... 11

1.6.2.

Part D Program Oversight........................................................................ 11

1.6.3.

Education and Outreach .......................................................................... 12

1.6.4.

Marketing Guidelines and Review ........................................................... 13

1.6.5.

Eligibility for the Low Income Subsidy Program ....................................... 13

1.6.6.

General Enrollment Processing ............................................................... 13

1.6.7.

Payment to Part D Sponsors ................................................................... 14

INSTRUCTIONS .................................................................................................... 15
2.1.

Overview ......................................................................................................... 15

2.2.

Other Technical Support ................................................................................. 15

2.3.

Health Plan Management System (HPMS) Data Entry ................................... 15

2.4.

Instructions and Format of Qualifications ........................................................ 16

2.4.1.

Instructions .............................................................................................. 16

2.4.2. Applicant Seeking to Offer New Employer/Union-Only Group Waiver Plans
(EGWPs) ................................................................................................................ 17
2.4.3.

Applicant Seeking to Offer New Employer/Union Direct Contract PFFS .. 18

2.4.4.

Applicant Entity Same as Contracting Entity ............................................ 19

2.4.5.

Joint Enterprise as Applicant and Contracting Entity ............................... 19

2.4.6.

Automatic Enrollment of Full-benefit Dual Eligible Individuals ................. 20

2.4.7.

Withdrawal of a Part D Application .......................................................... 20

2.4.8.

Technical Assistance ............................................................................... 20

2.5.

Submission Software Training ........................................................................ 21

2.6.

System Access and Data Transmissions with CMS ........................................ 21

2.6.1.

HPMS ...................................................................................................... 21

2.6.2.

Enrollment and Payment.......................................................................... 21

2.6.3.

Payment for MA–PD Sponsors ................................................................ 22

2.7.

Summary Instruction and Format for Individual Market Bids ........................... 22

2.7.1.

Format of Bids ......................................................................................... 22

2.7.2.

CMS Review of Bids ................................................................................ 23

2.7.3.

Overview of Bid Negotiation..................................................................... 24

2.8.

Pharmacy Access ........................................................................................... 24

2.8.1.

Retail Pharmacy Access .......................................................................... 24

2.8.2.

Home Infusion Pharmacy Access ............................................................ 26

2.8.3.

Long-Term Care Pharmacy Access ......................................................... 26

2.8.4.
(I/T/U)

Indian Tribe and Tribal Organization, and Urban Indian Organization
26

2.8.5.

Waivers Related to Pharmacy Access ..................................................... 27

2.9. Waivers Related to Attestations for MA-PD EGWP and Direct Contract
Applicants .................................................................................................................. 27

3.

2.10.

Standard Contract with MA-PD Sponsors ................................................... 28

2.11.

Protection of Confidential Information ......................................................... 28

2.12.

Waivers ....................................................................................................... 29

APPLICATION ....................................................................................................... 31
3.1.

Applicant Experience, Contracts, Licensure and Financial Stability ................ 31

3.1.1. Management and Operations 42 CFR Part 423 Subpart K; CMS issued
guidance 08/15/06 and 08/26/08 ............................................................................ 31
3.1.2. Program Integrity 2 CFR § 376 and Compliance Program 42 CFR §
423.504(b)(4)(vi); Prescription Drug Benefit Manual, Chapter 9 ............................ 37
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 ........................... 38
3.2.

Benefit Design................................................................................................. 41

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 .................................. 41
3.2.2. Utilization Management Standards 42 CFR §423.153(b); Prescription Drug
Benefit Manual, Chapter 6 and Chapter 7 .............................................................. 47
3.2.3. Quality Assurance and Patient Safety Affordable Care Act § 3310; 42 CFR
§423.153(c); Prescription Drug Benefit Manual, Chapter 7 .................................... 48
3.2.4. Medication Therapy Management 42 CFR §423.153(d); The Affordable
Care Act § 10328; Prescription Drug Benefit Manual, Chapter 7; .......................... 49

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 ............................................................................... 52
3.2.6.

Bids 42 CFR § 423.104, §423.265 and §423.272 .................................... 52

3.3. Service Area/Regions 42 CFR §423.112; Prescription Drug Benefit Manual,
Chapter 5 ................................................................................................................... 53
3.4. Private Fee-For-Service Pharmacy Access 42 CFR §423.120(a)(7);
Prescription Drug Benefit Manual, Chapter 5 ............................................................ 53
3.5. General Pharmacy Access 42 CFR §423.120(a); Prescription Drug Benefit
Manual, Chapter 5 ..................................................................................................... 55
3.5.1. Retail Pharmacy 42 CFR §423.120(a); 42 CFR §423.859(c); Prescription
Drug Benefit Manual, Chapter 5 ............................................................................. 56
3.5.2. Out of Network Access 42 CFR §423.124; Prescription Drug Benefit
Manual, Chapter 5.................................................................................................. 58
3.5.3. Mail Order Pharmacy 42 CFR §423.120(a)(10); Prescription Drug Benefit
Manual, Chapter 5.................................................................................................. 59
3.5.4. Home Infusion Pharmacy 42 CFR §423.120(a)(4); Prescription Drug
Benefit Manual, Chapter 5 ..................................................................................... 60
3.5.5. Long -Term Care (LTC) Pharmacy 42 CFR §423.120(a)(5); Prescription
Drug Benefit Manual, Chapter 5; CMS issued guidance 04/28/09 ......................... 60
3.5.6. 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 ..................................................................................... 62
3.5.7.

Specialty Pharmacy Prescription Drug Benefit Manual, Chapter 5 .......... 64

3.6. Enrollment and Eligibility 42 CFR §423.30 and 42 CFR §423.44 ; Prescription
Drug Benefit Manual, Chapters 3, 4, and 13; Plan Communications User Guide; CMS
issued guidance 07/21/09 .......................................................................................... 65
3.7. Complaints Tracking Prescription Drug Benefit Manual, Chapter 7; CMS issued
guidance 11/16/06, 07/28/2008, and 12/09/08 .......................................................... 68
3.8. Medicare Plan Finder Prescription Drug Benefit Manual, Chapter 7; CMS
issued guidance 07/17/06, 11/20/07, 08/21/08, and 05/20/10 .................................. 68
3.9. Grievances 42 CFR Part 423 Subpart M; Prescription Drug Benefit Manual,
Chapter 18 ................................................................................................................. 69
3.10.
Coverage Determinations (including Exceptions) and Appeals 42 CFR Part
423 Subpart M; Prescription Drug Benefit Manual, Chapter 18; Part D QIC
Reconsideration Procedures Manual ......................................................................... 70
3.11.
Coordination of Benefits 42 CFR Part 423 Subpart J; Prescription Drug
Benefit Manual, Chapter 14 ....................................................................................... 75

3.12.
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 77
3.13.
Medicare Secondary Payer 42 CFR §423.462; Prescription Drug Benefit
Manual, Chapter 14 ................................................................................................... 79
3.14.
Marketing/Beneficiary Communications 42 CFR §423.50, 42 CFR §423.128;
42 CFR §423.505; Prescription Drug Benefit Manual, Chapter 2 .............................. 80
3.15.

Provider Communications Prescription Drug Benefit Manual, Chapter 2 .... 83

3.16.
Reporting Requirements Affordable Care Act § 6005; 42 CFR §423.514;
2010 Reporting Requirements ................................................................................... 84
3.17.
(k)

Data Exchange between Part D Sponsor and CMS 42 CFR §423.505(c) and
87

3.18.
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 ........................................................................................... 88
3.19.
Prohibition on Use of SSN or Medicare ID number on Enrollee ID Cards
Prescription Drug Benefit Manual, Chapter 2 ............................................................ 89
3.20.

Record Retention 42 CFR §423.505(d) ....................................................... 89

3.21.
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 ............................................................................................. 90
3.22.
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 .................................................. 91
3.23.

Premium Billing 42 CFR §423.293; CMS issued guidance 03/08/2007....... 94

3.24.
Consumer Assessment of Healthcare Providers and Systems (CAHPS)
Survey Administration 42 CFR §423.156 ................................................................... 94
4.

CERTIFICATION ................................................................................................... 96

5.

APPENDICES ........................................................................................................ 98
APPENDIX I – Summary of Medicare Part D Regulatory Requirements Fulfilled
under Part C for Medicare Advantage Prescription Drug (MA-PD) Applicants ... 99
APPENDIX II --Organization Background and Structure .................................. 106
APPENDIX III -- Crosswalks of Section 3.1.1D Requirements in Subcontracts
submitted as Attachments to Section 3.1.1 ...................................................... 107
APPENDIX IV – Crosswalk for Retail Pharmacy Access Contracts ................. 111
APPENDIX V – Crosswalk for Mail Order Pharmacy Access Contracts ........... 114
APPENDIX VI – Crosswalk for Home Infusion Pharmacy Access Contracts ... 117
APPENDIX VII – Crosswalk for Long-Term Care Pharmacy Access Contracts 120
APPENDIX VIII – Crosswalk for Indian Tribe and Tribal Organization, and Urban
Indian Organization (I/T/U) Pharmacy Access Contracts ................................. 125

APPENDIX IX – Applicant Submission of P&T Committee Member List and
Certification Statement ..................................................................................... 129
APPENDIX X – I/T/U Revised Addendum ........................................................ 134
APPENDIX XI – Compliance Program Crosswalk ............................................ 142

1. GENERAL INFORMATION
1.1. Purpose of Solicitation
The Centers for Medicare & Medicaid Services is seeking applications from qualified
entities to enter into contracts to offer qualified prescription drug coverage as described
in the Medicare Prescription Drug Benefit Final Rule published in the Federal Register
on January 28, 2005 (70 Fed. Reg.4194). Please submit your applications according to
the process described in Section 2.0.
If your organization, or your parent or affiliated organization is already under a Medicare
Advantage-Prescription Drug (MA-PD) 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 MAPD 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.
If your organization or your parent or affiliated organization already has a MA-PD
contract with CMS to offer the Part D benefit, and you are seeking to offer a new
product line under a new contract, then you are required to complete this application.

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, 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. MA organizations approved to offer Part D benefits

(hereinafter referred to as ―MA-PD sponsors‖) must offer Part D coverage throughout
their approved MA service area.
Applicants who offer either a PDP or MA-PD plan may offer national plans (with
coverage in every region) or regional plans. MA-PD plan applicants may also offer local
plans. CMS has identified 26 MA Regions and 34 PDP Regions; in addition, each
territory is its own PDP region. Additional information about the regions can be found on
the www.cms.hhs.gov/ website.
This solicitation is only for entities seeking to operate a MA-PD plan (either in the
individual market, employer market or a combination of both markets). Separate Part D
solicitations are also posted on the CMS website for entities offering PDP Plans, for
entities offering Cost Plans with a Part D benefit, and for entities offering PACE Plans
with a Part D benefit.
Only specific types of MA organizations (i.e., entities offering Medicare coordinated care
plans or Medicare private fee-for-service plans) may submit a Part D application in
response to this solicitation. Medicare reasonable cost plans (as defined under Section
1876 of the Social Security Act), Program of All Inclusive Care for the Elderly (PACE)
organizations (as defined in section 1894 of the Social Security Act), and employer
groups 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.
It is important to note that MA organizations offering coordinated care plans must qualify
to offer at least one plan that includes both Part C and Part D benefits throughout the
organization‘s approved Part C service area. Similarly, MA organizations offering a
preferred provider organization (PPO) plan must offer Part D coverage throughout the
PPO regions in which they are approved to offer a Part C plan. However, MA
organizations offering private fee-for-service plans may, but are not required to, offer a
Part D benefit.
CMS payment to MA organizations for provision of Part C services to their enrollees is
calculated separately from the payment for the Part D benefit. Like PDP sponsors, MAPD 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.

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 MA-PD Sponsor Role and Responsibilities
Key aspects of each MA-PD Sponsor shall include the ability to:
Submit a formulary (considered an element of the bid) each year for CMS approval.
As part of the annual bidding process MA Coordinated Care Plans (CCPs) must
submit at least one MA-PD plan for CMS approval. An MA organization offering a
coordinated care plan must offer at least one MA-PD plan throughout its approved
MA service area. An MA private fee-for-service (MA-PFFS) contractor may, but is
not required to, offer a Part D Benefit to beneficiaries within its service area.
Enroll all eligible Medicare beneficiaries who apply and reside within the MA-PD
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.
MA-PDs (except Medicare private fee-for-service plans meeting certain criteria) must
feature a contracted retail pharmacy network, providing enrollees convenient access
to retail pharmacies as specified in 42 CFR §423.120.
Process claims at the point of sale.
All MA-PDs must operate quality assurance programs. MA-PDs, except MA-PFFS
plans meeting specific requirements, must also provide 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 Part C contract.
The second phase has two steps – the formulary upload which begins March, 2012 and
the bid upload which begins May, 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 managed care 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 MA-PD sponsors‘ grievance processes as
well as conduct periodic site visits to verify MA-PD 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. Review of MA-PD plan materials will be conducted in conjunction
with review of Part C marketing materials under 42 CFR §422.80 and 42 CFR §423.50.
MA-PD 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 MA organizations. Beneficiaries enrolled in an MA plan must
obtain qualified prescription drug coverage through that plan (42 CFR §423.30(b)),
unless they are enrolled in a MA private fee-for-service plan that does not provide
qualified prescription drug coverage (42 CFR §423.30(b)(1)), or they are enrolled in a
MSA plan (42 CFR §423.30(b)(2)).
CMS reviews an individual‘s status as a Medicare beneficiary. 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. Fullbenefit dual eligible beneficiaries who do not enroll in Part D plans are automatically
enrolled into a stand-alone drug plan, and other low-income beneficiaries are enrolled
through ―facilitated enrollment‖. 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 Part D Sponsors
CMS provides payment to MA-PD sponsors in the form of advance monthly payments
(consisting of the MA-PD plan‘s standardized bid, risk adjusted for health status, minus
the beneficiary monthly premium), estimated reinsurance subsidies, estimated lowincome 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 by those MA organizations that intend to offer a new
MA-PD during 2013. This application is to be submitted to CMS in conjunction with the
documents required for participation in the Part C program during 2013. Please refer to
the guidance for MA and Cost Plan sponsors posted on the CMS web site for
instructions on the type of MA documentation your organization must provide to CMS to
qualify to operate an MA plan during 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

MA-PD and/or Regional Preferred Provider Organizations (RPPOs) that submit a Notice
of Intent to Apply form are assigned a pending contract number (H/R number) to use
throughout the application and subsequent operational processes. Once the contract
number is assigned, and MA-PD and/or RPPO 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 (see section 3.1.3). 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 MA-PD 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 MA-PD 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 MA-PD 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 the 2013 Application Instructions for MA

Organizations to Offer New Employer/Union-Only Group Waiver Plans. The 2013
Application Instructions for MA Organizations to Offer New Employer/Union-Only Group
Waiver Plans provides the Applicant with the ability to choose between only offering
―800 series‖ plans and participating in both the individual and group markets for Private
Fee-For-Service products. The document further specifies those individual market
requirements that are not applicable in the employer market. The document is available
on the cms. gov website.
Applicants Offering Individual and “800 Series” Plans – Pharmacy Access
Applicants offering both individual and ―800 series‖ plans are not required to submit
separate pharmacy access lists (retail, mail order, home infusion, long-term care, I/T/U)
for their ―800 series‖ service areas in addition to those required to be submitted for their
individual plan service areas. Applicants 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 Applicant enrolls members of an employer or union
group residing in particular geographic locations outside of its individual plan service
area.
Applicants Only Offering “800 Series” Plans – Pharmacy Access
Applicants that intend to only offer ―800 series‖ plans (i.e., no plans will be offered to
individual Medicare beneficiaries under this contract number) will be required to submit
retail and other pharmacy access information (mail order, home infusion, long-term
care, I/T/U) for the entire defined EGWP service area during the application process
and demonstrate sufficient access in these areas in accordance with employer group
waiver pharmacy access policy.

2.4.3. Applicant Seeking to Offer New Employer/Union Direct Contract PFFS
New Direct Contract Applicants will be able to enter their service area directly into
HPMS during the application process.
In general, Part D sponsors can only cover beneficiaries in the service areas in which
they are licensed and approved by CMS to offer benefits. CMS has waived these
requirements for Direct Contract Sponsors. Direct Contract Sponsors can extend
coverage to all of their retirees, regardless of whether they reside in one or more
regions in the nation. In order to provide coverage to retirees wherever they reside,
Direct Contract Applicants must set their service areas to include all areas where
retirees may reside during the plan year.
Direct Contract Applicants are required to submit retail and other pharmacy access
information for the entire defined service area during the application process and
demonstrate sufficient access in these areas in accordance with employer group waiver
pharmacy access policy.
Those employers or unions seeking to directly contract with CMS to become Sponsors
for their Medicare-eligible retirees must complete the following materials:
The 2013 Medicare Advantage Application

The 2013 Solicitation for Applications for New Medicare Advantage Prescription
Drug Plan (MA-PD) Sponsors
The 2013 Initial Application for Employer/Union Direct Contract Private Fee-ForService (PFFS) Medicare Advantage Organization
The 2013 Financial Solvency & Capital Adequacy Documentation for Direct Contract
MA-PD Applicants (submitted electronically through fiscal soundness section for the
MA Supporting Files; Appendix can be found in the 2013 Initial Application for
Employer/Union Direct Contract Private Fee-For-Service (PFFS) Medicare
Advantage Organization
Appendix II—2013 Direct Contract Attestation

2.4.4. 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.

2.4.5. Joint Enterprise as Applicant and Contracting Entity
When reviewing MA-PD applications from potential MA Regional PPO sponsors
(RPPOs), CMS will recognize as Applicants those joint enterprises formed by
agreement among multiple state-licensed organizations (or organizations that have
applied to CMS for a licensure waiver) for the purpose of administering a Medicare
Prescription Drug Plan in at least one entire PDP region. Each member of the joint
enterprise will be contractually liable to CMS for the administration of the Part D benefit
in the State(s) in which it is licensed or for which it has received a CMS licensure
waiver.
The joint enterprise need submit only one MA-PD application on behalf of the
enterprise‘s member organizations and such application shall represent the joint
enterprise‘s commitment to offering a uniform benefit in each service area in which it will
offer Part D benefits. However, the information requested in Section 3.1 of this
solicitation must be provided for each member of the joint enterprise with separate
accompanying Appendices as necessary. For example, each joint enterprise member
must provide identifying information about its organization, copies of its executed
contracts with entities performing critical tasks related to the delivery of the Part D
benefit, and information related to its business integrity. The responses provided in the
remainder of the application may be made once by the joint enterprise applicant and will
be considered binding on each member of the joint enterprise. Also, a separate
certification statement, shown in Section 4.0, must be provided for each joint enterprise
member organization. Each certification statement must be signed by an individual
specifically granted the authority to bind the member organization.

Joint enterprise applicants are required to submit to CMS for approval a copy of the
executed agreement among the joint enterprise member organizations. Please see
Section 3.1.2.G, for instructions concerning this requirement.
Upon CMS‘ determination that the members of the joint enterprise are qualified to enter
into a Part D addendum to the Applicant‘s Medicare Advantage contract to offer a
RPPO, and approval of the bid(s) submitted by the joint enterprise, CMS will enter into a
multiple-party MA Part D addendum signed by authorized representatives of CMS and
each member of the joint enterprise.

2.4.6. Automatic Enrollment of Full-benefit Dual Eligible Individuals
As provided for in 42 CFR §423.34(d), individuals who are dually eligible for Medicare
and full Medicaid benefits, and who fail to enroll in a Part D plan, will be enrolled
automatically in a Part D plan, unless the individual declines the enrollment. As such,
CMS requires that MA organizations offering both MA-PD and MA-only plans have a
process for auto- and facilitated enrollment. All low-income eligible individuals who
elect an MA plan without Medicare prescription drug benefits (MA-only plan) will be
auto- or facilitated enrolled into the MA-PD plan in the same organization with the
lowest combined Part C and Part D premium amount. If more than one MA-PD plan
have the same lowest premium amount, enrollment must be random among the
available MA-PD plans. For PFFS plans, if the organization offers a stand-alone PDP in
the same region with a basic benefit and a premium at or below the low-income
premium subsidy amount for that region, the organization may auto/facilitate enrollment
into that PDP. The MA organization‘s auto- and facilitated enrollment processes will
occur monthly.

2.4.7. 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.

2.4.8. 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 ,
2012. The deadline for formulary submission to CMS is 11:59 PM EDT on April, 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, 2012 and the CY 2013
bid deadline of June, 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
MA-PD organizations will use HPMS to communicate with CMS in support of the
application process, formulary submission process, bid submission process, ongoing
operations of the Part D program, and reporting and oversight activities. MA-PD
applicants are required to secure access to HPMS in order to carry out these functions.

2.6.2. Enrollment and Payment
All MA-PD 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, MA-PD 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 CMS provides responses to Sponsor submitted information and reports to each
MA-PD sponsor for each of their plans with member and plan-level information. MA-PD

sponsors must compare the membership and payment information in those reports on
an ongoing basis with their records and report any discrepancies to CMS according to
the instructions and within the timeframes provided by CMS for that purpose. Each MAPD 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#TopO
fPage). The MAPD Help Desk also provides additional system and technical
information at www.cms.gov/mapdhelpdesk/.

2.6.3. Payment for MA–PD Sponsors
Payments will be wired to sponsor accounts on the first day of each month (or the last
business day of the prior month if the first day of the month is not a business day).
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
Each MA-PD Applicant must submit to CMS a bid for each prescription drug plan it
intends to offer. Applicants using this solicitation may apply to offer full risk Part D
plans. Applicants must submit their formularies to HPMS on or before April, 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 - April
, 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 MA-PD 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 MA-PD 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 per the
instructions at section 3.3B and as explained in section 3.5.1B 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 georeports 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 3.5.4). 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 3.5.5). 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 3.5.6). 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 MA-PD Plans. CMS guidance regarding waivers of the pharmacy access
and any willing pharmacy requirements for certain MA-PD 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 for MA-PDs
As described in section 50.7.1 of Chapter 5 of the Prescription Drug Benefit Manual, the
requirement that MA-PD sponsors must offer their Part D plan benefit through a
contracted retail pharmacy network that meets CMS convenient access standards is
waived for MA-PD sponsors that operate their own pharmacies. MA-PD sponsors 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 Convenient Access Standards for MA-PFFS
As described in section 50.7.2 of Chapter 5 of the Prescription Drug Benefit Manual, the
requirement that MA-PD sponsors must offer Part D plan benefits through a contracted
pharmacy network that meets CMS convenient access standards is waived for MAPFFS plans that meet the criteria in table 3.4.
Waiver of Any Willing Pharmacy Requirements for MA-PD
As described in section 50.8.2 of Chapter 5 of the Prescription Drug Benefit Manual, the
requirement that MA-PD sponsors must offer a network pharmacy contract to any willing
pharmacy that agrees to accept MA-PD sponsor‘s standard terms and conditions is
waived for MA-PD sponsors that own and operate the pharmacies in their network. MAPD sponsors 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 3.5.1F of this solicitation.

2.9. Waivers Related to Attestations for MA-PD EGWP and Direct
Contract 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 MA-PD Sponsors
Successful Applicants will be deemed qualified to enter into a Part D addendum to their
Medicare Advantage contract after CMS has reviewed the Applicant‘s entire
submission. Under this addendum the MA-PD sponsor will be authorized to operate
one or more Medicare prescription drug plans. 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.

2.12. Waivers
CMS is authorized to grant waivers of Part D program requirements where such a
requirement conflicts with or duplicates a Part C requirement, or where granting such a
waiver would improve the MA-PD sponsor‘s coordination of Part C and Part D benefits.
Accordingly, CMS has identified the waivers it is granting to all MA-PD sponsors in the
chart shown in Appendix I Summary of Medicare Part D Regulatory Requirements
Fulfilled under Part C for Medicare Advantage Prescription Drug (MA-PD) Applicants.
As a result of these CMS-granted waivers, the MA-PD sponsor application is less
comprehensive than the PDP sponsor application. These waivers will be reflected in
each MA-PD sponsor‘s Part D addendum.
Applicant Requests for Additional Waivers: CMS may grant additional waivers upon an
MA-PD sponsor‘s request, provided that the waivers may be justified because the Part
D requirement is duplicative of or conflicting with Part C requirements or the waiver will
improve the coordination of Part C and Part D benefits. Any waiver granted by CMS will
apply to all similarly situated MA-PD sponsors.
For each waiver request, the Applicant must provide, as an upload in HPMS, a
statement that includes:
1. The Part D regulation reference.
2. The appropriate waiver criteria (e.g., duplicative, conflicts, improves benefit
coordination).
3. A discussion of how the requested waiver meets at least one of the three waiver
criteria.
CMS will notify Applicants whether their requests were approved via a CMS web
posting of all approved waivers. As noted above, waivers granted will be reflected in
each MA-PD sponsor‘s Part D addendum.
Where this application directs the Applicant to attest that it will meet a particular Part D
requirement for which the Applicant has requested a waiver, the Applicant should check
both the ―Yes‖ box and the ―Waiver Requested‖ box within HPMS. In the event that
CMS does not approve a particular waiver, the Applicant will still have attested that it
will meet all the applicable Part D program requirements and remain eligible to enter
into a Part D addendum upon approval of its bids. This process will prevent Applicants
from having to submit additional application responses after the original February 24,

2012 deadline. If, as a result of CMS‘ denial of its waiver request, the Applicant no
longer intends to offer a Part D benefit plan, the Applicant must notify CMS in writing on
or before June 30, 2012. CMS will not execute a Part D addendum with Applicants that
submit such a notice. This notice of withdrawal should be sent to:
Centers for Medicare & Medicaid Services (CMS)
Center for Medicare
Attention: Application Withdrawal
7500 Security Boulevard
Mail Stop C1-26-12
Baltimore, Maryland 21244-1850

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 MA-PD 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 Medicare Advantage 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.

First tier,
Downstream and
Related entities

Off-Shore
yes/no

A pharmacy benefit
program that operates
an enrollee grievance
and appeals process
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

No

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
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

Name/Title

Mailing
Address (PO
Boxes may
not be used)

Phone/Fax
Numbers

Email
Address

Medicare Compliance
Officer
Enrollment Contact
Medicare Coordinator
System Contact
Customer Service
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
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

Yes

No

Requesting
Waiver?

Yes or No

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 CMSestablished 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 nonformulary 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 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.
4. 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.
5. 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.
6. 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,

Yes

No

Requesting
Waiver?

Yes or No

and therapeutic interchange protocols.
7. 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.
8. 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.
9. 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.
10. Applicant‘s P&T committee approves inclusion or
exclusion of the therapeutic classes in the formulary on
an annual basis.
11. The majority of the membership of the Applicant‘s P&T
committee are practicing physicians and/or practicing
pharmacists.
12. 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.
13. 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.
14. Applicant‘s P&T committee recommends protocols and
procedures for the timely use of and access to both
formulary and non-formulary drug products.

15. 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).
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

Yes

No

Requesting
Waiver?
Yes or No

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
If the Applicant is an MA Private Fee for Service (MA-PFFS) organization, as described in 42
CFR §422.4 (a)(3), the utilization management requirements used as the basis for this
subsection of the application do not apply. (See 42 CFR §423.153(e).) The MA-PFFS
Applicants should proceed to subsection 3.2.3 ―Quality Assurance and Patient Safety‖ of the
application.

A. In HPMS, complete the table below:
Applicant must attest „yes‟ to each of the following
qualifications to be approved for a Part D contract.
Attest „yes‟ or „no‟ to each of the following qualifications
by clicking on the appropriate response in HPMS:
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, 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.

Yes

No

Requesting
Waiver?
Yes or No

4. Applicant has incentives to reduce costs when medically
appropriate such as, but not limited to encouragement of
generic utilization.
5. Applicant agrees to submit 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.
3. Applicant develops and implements internal medication
error identification and reduction systems.
4. Applicant reduces wasteful dispensing of outpatient
prescription drugs in long-term care facilities by utilizing
specific, uniform dispensing techniques, such as weekly,
daily, or automated dose dispensing as established by
CMS.

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;
If the Applicant is an MA Private Fee for Service (MA-PFFS) organization, as described
in 42 CFR §422.4(a)(3), the medication management standards used as the basis for
this sub-section of the application do not apply (See 42 CFR §423.153(e)). The MAPFFS Applicants should proceed to sub-section 3.2.5 ―Electronic Prescription Program‖
of the application.
A. In HPMS, complete the table below:
Applicant must attest „yes‟ to each of the following
qualifications to be approved for a Part D contract.
Attest „yes‟ or „no‟ to each of the following qualifications
by clicking on the appropriate response in HPMS:
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

Yes

No

Requesting
Waiver?

Yes or No

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:
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 clicking on the appropriate
response in HPMS:

Yes

No

Requesting
Waiver?
Yes or No

1. Applicant supports and complies with electronic
prescription standards relating to covered Part D
drugs for Part D enrollees.
2. Applicant has an electronic prescription drug program
that complies with final Part D standards for
transmitting, directly or through an intermediary,
prescriptions and prescription-related information
using electronic media for covered Part D drugs for
Part D eligible individuals.
3. Applicant obtains the Prescription Origin Code on
original prescriptions submitted via the NCPDP 5.1
option field 419 DJ and reports this code on their
PDE submissions.
4. Applicant agrees that as it implements, acquires, or
upgrades health information technology (HIT)
systems, where available, the HIT systems and
products meet standards and implementation
specifications adopted under section 3004 of the
Public Health Services Act as added by section
13101 of the American Recovery and Reinvestment
Act of 2009, P.L. 111-5.

3.2.6. Bids 42 CFR § 423.104, §423.265 and §423.272
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 limits the number of submitted bids in a service area to those
that would demonstrate meaningful differences in benefit packages or

Yes

No

plan costs to a beneficiary.
2. Applicant has reviewed Section 2.4 of this application and understands
that for the purpose of assigning autoenrollments, all bids that are below
the low income subsidy threshold for all PDP contracts offered by the
applicant‘s parent organization, its affiliates and itself will be counted as
one.
3. Applicant agrees to offer the plan to all Part D eligible beneficiaries
residing in the applicant‘s service area; and at a uniform premium, with
uniform benefits and level of cost-sharing throughout the plan service
area.

3.3. Service Area/Regions 42 CFR §423.112; Prescription Drug
Benefit Manual, Chapter 5
If Applicant is offering a local MA-PD plan (as defined under 42 CFR §422.2) then the
plan service area does not have to meet a regional definition.
A. Only Applicants that intent to offer a Regional PPO plan must complete the
table below in HPMS:
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 offers Part D coverage for the entire MA
region(s) to be operated under the Regional PPO plan.
B. Complete in HPMS, in the Contract Management/Contract Service
Area/Service Area Data page, the service area information indicating the regions
(including territories) you plan to serve.
Information on MA regions may be found on the www.cms.hhs.gov/ website. Be sure to
list both the MA region name and associated number. Note: CMS bases its pharmacy
network analyses on the service area your organization inputs into HPMS. Please make
sure that the service area information you input into HPMS corresponds to the
pharmacy lists that are provided under the Pharmacy Access section of the application.

3.4. Private Fee-For-Service Pharmacy Access 42 CFR
§423.120(a)(7); Prescription Drug Benefit Manual, Chapter 5
A. In HPMS, complete the table below ONLY if you are a Private Fee For Service
Applicant. Otherwise, proceed directly to General Pharmacy Access.
Applicant must attest „yes‟ to each of the following
qualifications to be approved for a Part D contract.

Requesting
Waiver?

Attest „yes‟ or „no‟ to each of the following
qualifications by clicking on the appropriate response
in HPMS:
1. Applicant uses a contracted network of pharmacies and
therefore meets the retail pharmacy convenient access
standards; LTC and I/T/U pharmacy convenient access
standards; and home infusion pharmacy adequate
access standards. Note: If answer Yes, Applicant
must complete all of Section 3.5.
2. If Applicant attests ‗NO‘ to 3.4A1, Applicant provides
coverage for drugs purchased from all pharmacies,
regardless of whether they are network pharmacies.
3. If Applicant attests ‗NO‘ to 3.4A1, Applicant does not
charge additional cost-sharing to beneficiaries for
obtaining their drugs at a non-network pharmacy.
4. If Applicant attests ‗NO‘ to 3.4A1, Applicant provides
access at non-network pharmacies by reimbursing the
pharmacy its Usual and Customary price (defined as
the price an out of network pharmacy charges a
customer who does not have any form of prescription
drug coverage for a covered Part D drug) minus any
applicable beneficiary cost sharing.
5. If Applicant attests ‗NO‘ to 3.4A1, Applicant does not
routinely rely on billing practices that require enrollee to
pay the usual and customary price upfront and then
submit a paper claim to the applicant for
reimbursement.
6. If Applicant attests ‗NO‘ to 3.4A1, Applicant has
policies and procedures appropriately restricting the
use of paper claims only to the situations in which
online claims processing is not available at the point of
sale in order to promote accurate TrOOP accounting,
as well as to minimize administrative costs to the Part
D plans and the Medicare program and opportunities
for fraudulent duplicate claims reimbursement.
7. If Applicant attests ‗NO‘ to 3.4A1, Applicant arranges
for automated, online billing at non-network pharmacies
(similar to the way in which our point-of-sale contractor
has allowed for online billing by non-contracted
pharmacies).

Yes

No

Yes or No

Note: Only if Applicant attests No to 3.4.1, and Yes to 3.4A2-4, Applicant may move
directly to Section 3.6 and will be granted a waiver of convenient access.

3.5. 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 MA-PD
sponsor‘s 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 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.

3.5.1. 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.
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.
1. Indicate the geographic areas in which the applicant cannot demonstrate that it
meets the retail pharmacy convenient access standards
2. Explain why these standards cannot be met. Include in the discussion relevant
information such as geographic barriers, pharmacy infrastructure barriers, and/or
market barriers.
3. 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 3.5.1D. 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 for MA-PDs
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 for MA-PDs
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.

3.5.2. 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-ofnetwork 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 outof-network pharmacy. Applicant may override the one
month limit only on a case-by-case basis when warranted
by extraordinary circumstances.

3.5.3. 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.

Yes

No

Requesting
Waiver?

Yes or No

1. Applicant offers mail order pharmacy as part of its Part D
plans.
2. If Applicant attests ‗Yes‘ to 3.5.3A1, does Applicant‘s mail
order contract include an extended (e.g., 90) day supply?
3. If Applicant attests ‗YES‘ to 3.5.3A2, 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 one-month 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.

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

3.5.5. 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

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:
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 section 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 outof-network 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

Yes

No

Waiver?

Yes or No

is ongoing as Applicant continues to identify LTC facilities
and LTC pharmacies, and as Applicant examines autoenrollment assignments and incoming enrollments.
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.

3.5.6. 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:

Yes

No

N/A

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.
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.
Applicant must attest „yes‟ or „no‟ to each of the
following qualifications by clicking on the
appropriate response in HPMS to be approved for
a Part D contract:

Yes

No

N/A

Requesting
Waiver?

N/A

Requesting
Waiver?

Yes or No

4. 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.
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

Yes

No

Yes or No

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.
5. 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.
6. 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 counties 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.

3.5.7. 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

Yes

No

Requesting
Waiver?

Yes or No

limiting distribution through a subset of network
pharmacies, except when necessary to meet FDA
limited distribution requirements or to ensure the
appropriate 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.

3.6. Enrollment and Eligibility 42 CFR §423.30 and 42 CFR §423.44 ;
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. Applicant identifies full dual and other LIS eligible
individuals enrolled in MA-only plans and conducts autoand facilitated enrollment of these individuals in

Yes

No

Requesting
Waiver?
Yes or No?

accordance with the guidance provided by CMS.
3. Applicant complies with CMS operational guidance on
Creditable Coverage and the Late Enrollment Penalty.
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,
Periods of enrollment in a retiree prescription drug plan
whose sponsor receives a retiree drug subsidy from
Medicare, and
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 non-matches 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 cost-sharing 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 Benefit
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 downloads at least daily and processes all
enrollment elections made via the on-line enrollment
center (OEC) hosted by CMS.
13. 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.
14. Applicant reviews all systems responses, files and
reports received from CMS and compares these to its
internal data to identify discrepancies and reconcile
enrollment information, beneficiary status (such as LIS)
and payment data.
15. 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.
16. Applicant establishes connectivity to CMS as noted in
the instructions provided by the MAPD Help Desk at 1800-927-8069 or via the MAPD HelpDesk webpage,
www.cms.gov/mapdhelpdesk, in the Plan Reference
Guide for CMS Part C/D system link.
17. Applicant has a CMS User ID and Password.

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

3.8. Medicare Plan Finder Prescription Drug Benefit Manual, Chapter
7; CMS issued guidance 07/17/06, 11/20/07, 08/21/08, and 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 its current and accurate calendar year

Yes

No

Requesting
Waiver?

Yes or No

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.
4. Applicant responds 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.

3.9. 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.
Yes
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 enrollees of
grievance dispositions, and

No

Requesting
Waiver?

Yes or No

Trains relevant staff and first tier, downstream and
related entities on all regulatory requirements.
4. Applicant informs enrollees about 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
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 PDP sponsor‘s
operations, activities, or behavior, regardless of whether remedial action is requested.
Examples of subjects of a grievance include, but are not limited to:
Timeliness, appropriateness, access to, and/or setting of services provided by the
PDP sponsor
Concerns about waiting times, demeanor of pharmacy or customer service staff
A dispute concerning the timeliness of filling a prescription or the accuracy of filling
the prescription.

3.10. 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:

Requesting
Waivers?

Yes or No

Yes

No

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 42 CFR § 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 42 CFR § 423.562(a)(5). The
medical director is responsible for ensuring the clinical
accuracy of all coverage determinations and
redeterminations involving medical necessity.
4. Applicant retains the services of physicians or other
appropriate health care professionals per the
requirements in 42 CFR §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).

3.11. 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:
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

Requesting
Waiver?
Yes

No

Yes or No

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, enter 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 Benefit
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 on 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.

3.12. 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.

Requesting
Waiver?
Yes

No

Yes or No

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
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 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

3.13. 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.
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

Requesting
Waiver?
Yes

No

Yes or No

established that a certain drug is being used exclusively to
treat a related injury.

3.14. 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

Requesting
Waiver?
Yes

No

Yes or No

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
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, including but not limited to: a) describes
the Applicant‘s Part D current, approved formularies, b)
describes prior authorization criteria, step therapy
requirements, and quantity limits, and c) provides 60days‘ notice to potential and current plan enrollees
regarding negative changes including the removal or
change in the tier placement of any drug on the plan‘s
formulary.
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 yearto-date statement of the total Part D benefits provided in
relation to deductibles, coverage limits, and annual out-ofpocket thresholds; d) cumulative year-to-date 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.

3.15. 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 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 appeals 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,

Requesting
Waiver?

Yes or No

Yes

No

exception, or appeal) and whether the request is an
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 appeals 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.

3.16. 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 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.

Requesting
Waiver?

Yes or No

5. Applicant submits audited financial statements to CMS
annually.
Claims Data
6. 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).
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
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).
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
submitting data to CMS via the Medicare Data
Communications Network (MDCN).
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
performing data edit and quality control procedures
(including resolution of rejected claims) to ensure
accurate and complete prescription drug data.
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
correcting all data errors identified by CMS.
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
collecting data for dates of service within the coverage

year with a 3-month closeout window for the submission
of remaining unreported claims data.
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
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
13. 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
14. 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.
15. 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
16. 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

17. The Applicant provides financial and organizational
conflict of interest reports to CMS.
PBM Transparency
18. The Applicant‘s PBM provides information related to
PBM transparency as specified in Section 6005 of the
Affordable Care Act.

3.17. 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 reconciles Part D data to CMS
enrollment/payment reports received daily, weekly and
monthly.
3. 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.
4. Applicant participates in connectivity testing and other
system testing measures as provided to the Applicants
prior to contract execution to validate system setup.
5. Applicant has system(s) to process enrollment and
payment transactions as exchanged with CMS in

Requesting
Waiver?
Yes

No

Yes or No

accordance with system development lifecycle
standards.
6. Applicant ensures appropriate security safeguards and
protocols are in place to protect the protected health
information in the system(s).
7. Applicant maintains all pertinent system security and
disaster recovery plans and procedures.
8. 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.

3.18. 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
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

Requesting
Waiver?
Yes or No
Yes

No

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.

3.19. 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
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 use an enrollee‘s Social Security
Number (SSN) or Medicare ID Number on the enrollee‘s
identification card.

3.20. Record Retention 42 CFR §423.505(d)
A. In HPMS, complete the table below:

Requesting
Waiver?
Yes

No

Yes or No

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.

3.21. 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/pddtraining/pdd-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.

Requesting
Waiver?

Yes or No

Yes

No

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 provides diagnosis data for risk adjustment as
required by CMS.
6. Applicant meets all data submission deadlines.
7. Applicant pays all Plan-to-Plan payables on time.
8. Applicant complies with Medicare Coverage Gap
Discount Program requirements.
9. Applicant complies with timely response requirements
for PDE Data Quality Reviews posted on the Data
Quality Validation website.

3.22. 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
accordance with 42 CFR §423.568(b).

Requesting
Waiver?

Yes or No
Yes

No

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
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 copayments 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 issue refunds or
recovery notices within 45 days of the applicant‘s receipt
of complete information regarding the claims
adjustment.

3.23. 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 „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. 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.

3.24. 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

Yes

No

Requesting
Waiver?

Yes or No

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.

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)

Title

Authorized Representative Signature

Date (MM/DD/YYYY)

5. APPENDICES

APPENDIX I – Summary of Medicare Part D Regulatory
Requirements Fulfilled under Part C for Medicare Advantage
Prescription Drug (MA-PD) Applicants
Part D
Regulation

42 CFR
423Subpart I,
excepting 42
CFR §423.440
(which concerns
Federal
preemption of
State law and
prohibition of
State premium
taxes)
42 CFR

§423.153(b)
Waiver applies
to MA-PFFS
only

42 CFR

§423.153(d)
Waiver applies
to MA-PFFS
only

42 CFR
§423.112 (a)

42 CFR

§423.120 (a)(7)(i)
Waiver applies

Regulatory Requirement(s)

Basis for Waiver

Description
Licensure and Solvency –
Applicant must be licensed to bear
risk in the State in which it intends
to operate or apply for a licensure
waiver and meet CMS solvency
standards.

Duplicative of MA Organization
requirements for licensure and
solvency under 42 CFR §422.6 (i);
42 CFR §422.400; and 42 CFR
§422.501).

Utilization Management - Applicant Waiver stated in regulations at 42
must have a cost effective
CFR §423.153 (e) excuses MA
utilization management system.
PFFS organizations from meeting
the utilization management
requirements specified in 42 CFR
§423.153 (b).
Medication Therapy Management
Program – Applicant must have a
program to manage medication
therapy to optimize outcomes,
reduce adverse drug interactions.

Waiver stated in regulations at 42
CFR §423.153 (e) excuses MA
PFFS organizations from meeting
Medication Therapy Management
Program requirements specified in
42 CFR §423.153(d).

Service Area – Applicant must
offer a Part D plan that serves at
least an entire PDP region.

Conflicts with MA regulations (42
CFR§ 422.2) that allow MA
organizations to offer local MA
plans (i.e., plans that serve less
than an entire state).

Pharmacy Network – Applicant
must offer its Part D plan benefit
through a contracted retail
pharmacy network that meets
CMS convenient access

Waiver stated in regulations at 42
CFR§ 423.120(a)(7) (i) excuses
from the CMS convenient access
standards those MA organizations
that administer their Part D benefit

Part D
Regulation
only to MA-PDs
that operate
their own
pharmacies

42 CFR
§423.120(a)(7)(ii)

Regulatory Requirement(s)
Description
standards.

through pharmacies owned and
operated by the MA organization if
that organization‘s pharmacy
network access meets the CMS
convenient access standards .

Pharmacy Network – Applicant
must offer its Part D plan benefit
through a contracted retail
pharmacy network that meets
CMS convenient access standards

Waiver stated in regulations at 42
CFR §423.120 (a) (7) (ii). excuses
from the CMS convenient access
standards those MA-PFFS
organizations that offer a qualified
prescription drug coverage, and
provide plan enrollees with access
to covered Part D drugs dispensed
at all pharmacies, without regard to
whether they are contracted
network pharmacies and without
charging cost-sharing in excess of
the requirements for qualified
prescription drug coverage.

Pharmacy Network – Applicant
must offer its Part D benefit
through any willing pharmacy that
agrees to meet reasonable and
relevant standard network terms
and conditions.

Waiver promotes the coordination
of Parts C and D benefits. Excuses
from CMS any willing pharmacy
requirement those MA
organizations that administer their
Part D benefit through pharmacies
owned and operated by the MA
organization and dispense at least
98% of all prescriptions through
pharmacies owned and operated
by Applicant.

Enrollment and Eligibility –
Applicant agrees to accept Part D
plan enrollments and determine
Part D plan eligibility consistent
with Part D program requirements.

Duplicative of MA requirements
under 42 CFR §422 Subpart B Eligibility, Election, and Enrollment.
MA organizations will conduct
enrollment and determine eligibility
consistent with MA program
requirements. These requirements
mirror those stated in the Part D
regulation.

Reporting Requirements –
Applicant must report information
concerning significant business
transactions.

Duplicative of MA requirements for
reporting significant transactions
under 42 CFR §422.500 and 42
CFR §422.516(b) and (c) and

Waiver applies
to MA-PFFS
plan that
provides access
through all
pharmacies.

42 CFR
§423.120(a)(8)(i)
Waiver applies
only to MA-PDs
that operate
their own
pharmacies

42 CFR §423.34
42 CFR §423.36
42 CFR §423.38
42 CFR §423.40
42 CFR §423.44

42 CFR

§423.514(b) and

Basis for Waiver

Part D
Regulation

Regulatory Requirement(s)
Description

(c)
42 CFR

§423.514(e)

42 CFR

§423.512

Basis for Waiver

requirements for providing annual
financial statements.
Reporting Requirements –
Applicant must notify CMS of any
loans or any other special
arrangements it makes with
contractors, subcontractors, and
related entities.

Duplicative of MA requirement for
reporting loans or special
arrangements under 42 CFR
§422.516(e).

Experience and Capabilities –
Applicant must reach the minimum
enrollment standard within the first
year it offers a Part D benefit.

Conflicts with MA regulation at 42
CFR §422.514 that permits three
years to achieve the minimum
enrollment level.

APPENDIX II – Direct Contract MA-PD Attestations
1. EGWP 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 MAPD Sponsors. Direct Contract MA-PD Sponsors can extend coverage to all of their retirees,
regardless of whether they reside in one or more MA regions in the nation. In order to provide
coverage to retirees wherever they reside, Direct Contract MA-PD Sponsors must set their service
areas to include all areas where retirees may reside during the plan year. 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
Direct Contract MA-PD. 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 Medicare Advantage
Prescription Drug Plan (MA-PD) Sponsors apply to all plan benefit packages offered by the
Direct Contract MA-PD 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 Direct Contract MA-PD Applicants are noted in parentheses).
I, the undersigned, certify to the following:
1) Applicant is applying to offer new employer/union-only Direct Contract Medicare Advantage
Prescription Drug Plans and agrees to be subject to and comply with all CMS
employer/union-only group waiver guidance.
2) Applicant must complete and submit the 2013 Medicare Advantage Application, 2013 Initial
Application For Employer/Union Direct Contract Private Fee-For-Service (PFFS) or Direct
Contract (CCP) Medicare Advantage Organization, and the underlying 2013 Solicitation for
Applications for New Medicare Advantage Prescription Drug Plan (MA-PD) Sponsors in
addition to the Appendix entitled ―Part D Financial Solvency & Capital Adequacy
Documentation for Direct Contract MA-PD Applicants.‖ All these documents comprise new
Direct Contract MA-PD Applicant‘s entire Direct Contract MA-PD application.
3) Applicant agrees to restrict enrollment in its Direct Contract MA-PD plans to those Medicare
eligible individuals eligible for the employer‘s/union‘s employment-based group coverage.

4) Applicant is not required to submit a 2013 Part D bid (i.e., bid pricing tool) to offer its Direct
Contract MA-PD. (Section 2.7)
5) 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 MA-PD‘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 3.5.1A1)
6) Applicant understands and agrees that as part of its completion of the underlying
application, it submits retail pharmacy access and other pharmacy access submissions (mail
order, home infusion, long-term care, I/T/U) required at the time of application for its entire
designated service area. (Section 3.5)
7) Applicant understands that its Direct Contract MA-PD plans 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 3.6.A2)
8) Applicant understands that CMS has waived the requirement that the Direct Contract MAPD 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 MA-PD. (Sections 3.6.A10 and 3.24.A2-A4)
9) Applicant understands that dissemination materials for its Direct Contract MA-PD plans 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 9 of the
Medicare Managed Care Manual (MMCM). 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 3.14A1)
10) Applicant understands that its Direct Contract MA-PD 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 3.14A12)
11) Applicant understands that the dissemination requirements set forth in 42 CFR §423.128 do
not apply to its Direct Contract MA-PD plans 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 9 of the MMCM. (Section 3.14.A1-A2,
A10)
12) Applicant understands that its Direct Contract MA-PD 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 (Medicare Plan Finder). (Sections 3.8A and
3.17A14)
13) Applicant understands that its Direct Contract MA-PD plans are 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 3.14A7)
14) 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 MA-PDs 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 3.17A12-A13)
15) 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.
16) 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.
17) 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.
18) 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.
19) 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
Direct Contract plans in association with my organization‘s MA-PD Contract with CMS. I have
read and agree to comply with the above certifications.
{Entity MUST check box for a complete application.}

APPENDIX II --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 III -- 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 IV – 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 V – 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,
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 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

8. 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 VI – 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

9. 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 VII – 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 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
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

Citation

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 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 VIII – 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 IX – 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 X – 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
Representative

Title of Authorized Representative

Printed Name of Authorized

APPENDIX XI – 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.