CMS-10198 - Supporting Statement A [rev 11-21-2013 by OSORA PRA]

Supporting Statement Part A

Creditable Coverage Disclosure to CMS OnLine Form and Instructions

CMS-10198, _{OCN 0938-1013}

_Background

Most entities that currently provide prescription drug benefits to any Medicare Part D eligible individual must disclose to the Centers for Medicare & Medicaid Services (CMS) whether the prescription drug benefit that they offer is creditable (expected to pay at least as much, on average, as the standard prescription drug plan under Medicare). The disclosure is required to be provided annually and upon any change that affects whether the coverage is creditable prescription drug coverage. CMS released a Creditable Coverage Disclosure to CMS online form and guidance in January 2006.

_{A. Justification}

_{1 . Need and Legal Basis}

Section 1860D-13 of the Social security Act, as established by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) and implementing regulations at 42 CFR 423.56 requires that entities that offer prescription drug benefits under any of the types of coverage described in 42 CFR 423.56(b) provide a disclosure of creditable coverage to CMS’ informing us whether such coverage meets the actuarial requirements specified in guidelines provided by CMS in May 2005. In general, this actuarial determination measures whether the expected amount of paid claims under the entity’s prescription drug coverage is at least as much as the expected amount of paid claims under the standard Medicare prescription drug benefit. See 70 FR 4225 (January 28, 2005) for more information.

As outlined in the Disclosure to CMS Guidance paper, the initial disclosure to CMS was due no later than March 31, 2006 for any plan year that ends in 2006. For all subsequent plan years, the entity must disclose to CMS the creditable coverage status of the prescription drug benefit options being provided to Medicare Part D eligible individuals no later than sixty (60 days) following the beginning date of the entities plan year. As outlined under 42 CFR 423.56(f)(2), the entity must also provide a disclosure to CMS upon any change that affects whether the coverage is creditable prescription drug coverage. In an effort to reduce the paperwork burden associated with providing the annual disclosure to CMS, the Disclosure to CMS guidance paper outlines that entities are required to provide the disclosure to CMS via the on-line Disclosure to CMS webpage found at https://www.cms.hhs.gov/CreditableCoverage/45_CCDisclosureForm.asp.

2. Information Users

Disclosure of whether prescription drug coverage is creditable provides Medicare with important information relating to whether prescription drug benefits offered by an entity to Medicare Part D eligible individuals is expected to pay at least as much as the standard benefits under Medicare Part D.

The regulation at 42 CFR §423.46 outlines a late enrollment penalty (LEP) for Part D eligible individuals who go without creditable prescription drug coverage for any continuous period of sixty-three (63) days or longer after the end of their initial enrollment period for Part D coverage, and then subsequently enroll in Medicare prescription drug coverage.

Medicare eligible individuals who delay enrolling in Part D coverage may be required to provide copies of any disclosure notices provided to them by the entity that sponsors the prescription drug coverage in which they were enrolled as proof that they have maintained creditable prescription drug coverage since the end of their Medicare initial enrollment period. Otherwise, the beneficiary may be subject to the late enrollment penalty (LEP) outlined under 42 CFR §§ 423.46 and 423.286(c)(3) and in 70 Federal Register 13397, 13399 (March 21, 2005).

Upon notifying a beneficiary of any LEP determination, plans will advise the beneficiary of the right to ask for a review of CMS’ LEP decision. Plans must assist beneficiaries, for example, by making relevant documentation available to support the individual’s case, such as notices or other materials related to the initial decision. If an enrollee disagrees with a LEP decision made by CMS (including the determination of the number of months the individual was eligible to enroll in a Part D plan and did not have creditable prescription drug coverage) and the amount of the penalty based on an adverse creditable coverage determination, the enrollee may request reconsideration of that decision under a process described in Medicare Prescription Drug Benefit Manual, Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals, http://www.cms.hhs.gov/MedPrescriptDrugApplGriev/11_Guidance.asp#TopOfPage.

Additionally, as set forth under §423.56(g), CMS, upon review, may treat non-creditable coverage as creditable coverage for purposes of applying the late enrollment penalty if:

• an individual establishes that he/ she was not adequately informed that his/ her prescription drug coverage was not creditable prescription drug coverage,

• the individual has made a request in writing to obtain a copy of the creditable coverage disclosure from the entity sponsoring their prior plan, and

• the individual has not received a reply from the entity within a reasonable time. CMS uses the database information collected in the disclosure to assist beneficiaries during the appeals phase by providing the insuring entity’s contact information so that the individual may request a copy of the previously issued disclosure notices that entity provided its members.

3. Use of Information Technology

CMS issued and posted the on-line Disclosure to CMS form in January 2006 on the CMS website for all entities to complete. The initial disclosure to CMS for plan years ending in 2006 was required to be completed no later than March 31, 2006.

For all subsequent plan years that end in 2007 and beyond, entities must provide their disclosure to CMS via the on-line disclosure to CMS form no later than sixty (60) days following the beginning date of the entity’s plan year.

_{4. Duplication of Efforts}

The information collection requirements (ICRs) contained in the regulations are not duplicated through any other effort.

5. Small Businesses

There is no significant impact on small businesses who comply with these ICRs. Some entities are small businesses and will have to comply with all the information requirements described in this supporting statement.

_{6. Less Frequent Collection}

Less frequent collection is not applicable. This information is collected as required by statute and regulation as outlined in 42 CFR 423.56(f). By regulation, entities must provide disclosure to CMS in accordance with the ICRs.

7. Special Circumstances

The creditable coverage disclosure information will occur annually from entities as they renew their prescription drug programs. Entities who make mid-year changes to their prescription drug programs are also required under 42 CFR 423.56(f)(2) to provide a disclosure to CMS of any change in the creditable coverage status.

_{8. Federal Register/Outside Consultation}

The 60-day Federal Register notice published on June 28, 2013 (78 FR 38986). No comments were received.

In the course of developing the Final Regulations for the Medicare Prescription Drug Benefit Program (CMS-4068-F), the required Federal Register notice was published on August 3, 2004 (69 FR 46632). The Office of Management and Budget (OMB) waived the requirement for a second Federal Register notice. The final rule went on display on January 21, 2005 to announce the new or revised ICRs. The public meetings were held in February at CMS and written comments were received which were in turn utilized by CMS during the regulations drafting stage. Also, as necessary, CMS consulted with technical experts and industry and beneficiary advocates to obtain their opinions on the creditable coverage disclosure provisions of the statute. These consultations continued as CMS implemented the final rule. Additionally in 2009, CMS consulted with our contractor, Fu Associates, to revise the estimated burden hours to more accurately reflect the number of possible respondents.

9. Payments/Gifts to Respondents

_{There are no payments/gifts to respondents.}

_{10. Confidentiality}

The information collected regarding Medicare eligible individuals and contained in enrollment information must conform to all requirements at 42 CFR Part §423.56, and in all Federal and State laws regarding confidentiality and disclosure.

11. Sensitive Questions

_{There are no sensitive questions included in this collection effort.}

_{12. (a) Burden Estimates (Hours & Wages)}

Procedures to document creditable status of prescription drug coverage.

Each entity that offers prescription drug coverage under any of the types described in 42 CFR 423.56(b) must disclose to CMS whether such coverage meets the actuarial requirements specified in guidelines provided by CMS. These notices must be provided at minimum, at the following times: (1) annually as described under 42 CFR 423.56(e) and in guidance issued in January 2006, no later than sixty (60) days after the beginning date of the entity’s plan year; and (2) upon any change in creditable status. In an effort to reduce the burden associated with providing the disclosure to CMS, CMS developed an on-line disclosure web page for an entity to provide the required disclosure information to CMS annually, https://www.cms.hhs.gov/CreditableCoverage/45_CCDisclosureForm.asp .

The burden associated with this requirement is the time and effort necessary for each of these entities to provide a disclosure to CMS (including annual notices and notices of changes in creditable coverage status) regarding the creditable coverage status of the prescription drug coverage being offered by the entity to Medicare Part D eligible individuals. We estimate that 87,265 entities will be required to provide their disclosure to CMS via the Disclosure to CMS webpage using the on-line form.

Given that each entity will have made their annual determination of the creditable coverage status of their prescription drug plan for disclosure to Medicare Part D eligible individuals, the burden to provide the disclosure to CMS on-line via the Disclosure to CMS web page will be negligible. CMS estimates that it will take each entity approximately 5 minutes to complete their disclosure to CMS via the on-line Disclosure to CMS web page form for the annual disclosure to CMS notice of creditable coverage and notices of changes in creditable coverage status to CMS.

It is estimated that the burden per entity will be as follows:

• The estimate the annual burden on each of the 75,860 health plans to complete the on- line Disclosure to CMS web page form will be 5 minutes per plan for a total burden of 6321.7 hours. We also estimate that, on average, 1,500 of these health plans will experience changes in creditable coverage status during the year. They will be required to provide an additional notice regarding their new creditable coverage status to CMS via the on-line Disclosure to CMS web page, which will take 5 minutes per plan, for an annual burden of 125.0 hours. The estimated cost is $112,817.25 ($17.50 per hour multiplied by 6,446.70 hours).

• On average, for the sponsors of retiree drug coverage (with the exception of benefit options offered by sponsors that have applied and been accepted for the Retiree Drug Subsidy), we estimate that it will take 9,521 entities approximately 5 minutes each to complete the on-line Disclosure to CMS web page form for a total burden of 793.4 hours. We also estimate that 130 of these sponsors of retiree coverage will experience changes in creditable coverage status during the year. They will be required to provide an additional notice regarding their new creditable coverage status to CMS via the on- line Disclosure to CMS web page, which will take 5 minutes per plan, for an annual burden of 10.8 hours. The estimated cost is $14,073.50 ($17.50 per hour multiplied by 804.20 hours).

• On average, an estimated 204 Medigap issuers will provide a disclosure to CMS annually for a burden of 5 minute per notice (17 hours annually). Since Medigap policies will not be changed mid-year, we do not estimate that there will be a need to do any additional disclosures to CMS for any mid year changes in creditable coverage status. The estimated cost is $297.50 ($17.50 per hour multiplied by 17 hours).

• On average, CMS estimates that 10 State Pharmacy Plus programs will provide a disclosure notice to CMS for an annual burden of 5 minutes per program (.83 hours annually). The disclosure to CMS notice is required even these States may decide to lower their costs by reforming these programs. The estimated cost is $18.67 ($22.50 per hour multiplied by .083 hours).

• We estimate that each of the 11 State Pharmaceutical Assistance Programs will provide the disclosure to CMS notice for an annual burden of 5 minutes per State (9.2 hours annually). The estimated cost is $207.00 ($22.50 per hour multiplied by 9.2 hours).

• On average, we estimate that 29 Indian Health Service entities will provide the annual disclosure to CMS notice for an annual burden of 5 minutes per entity (2.4 hours annually). It is not expected that there will be a need to do any additional disclosures to CMS for any mid-year changes in creditable coverage status. The estimated cost is $54.00 ($22.50 per hour multiplied by 2.4 hours).

Table: Summary of Type of Respondent and Calculated Burden

Type of Plan/Respondent	Type of Notice	Number of Plans/ Respondents	Annual Number of Notices/ Responses	Estimated Minutes per Response		Annual Burden Hours
Health Plans	Annual and Initial Disclosure	75,860	75,860		5	6,321.7
	An Additional Change in Creditable Coverage Status	n/a	1,500		5	125.0
Retiree Drug Plan Sponsors	Annual and Initial Notices	9,521	9,521		5	793.4
	An Additional Change in Creditable Coverage Status	n/a	130		5	10.8
Medigap Issuers	Annual and Initial Notices	204	204		5	17.0
	An Additional Change in Creditable Coverage Status	0	0	0		0
State Pharmacy Plus Programs	Annual and Initial Notices	10	10		5	.83
	An Additional Change in Creditable Coverage Status	0	0		0	0
State Pharmaceutical Assistance Programs	Annual and Initial Notices	11	11		5	.92
	An Additional Change in Creditable Coverage Status	0	0		0	0
Indian Health Service	Annual and Initial Notices	29	29		5	2.4
	An Additional Change in Creditable Coverage Status	0	0		0	0
Totals		85,635	87,265		40	7,272.1

For more details, please refer to the Estimated Breakout of Estimates which is attached to this PRA package.

13. Capital Costs

_{There is no additional capital costs associated with these ICRs.}

_{14. Cost to Federal Government}

The cost to the Federal Government is $112,000. CMS contracted with Fu to provide a system so entities could report whether their prescription drug coverage was creditable. Fu was responsible for the following: creating an online system in accordance with CMS specifications; developing, testing and implementing release/enhancement packages on servers; trouble shooting; maintain technical help line to support the system; as well as maintain and update support services.

15. Changes to Burden

The previous PRA package estimated the number of responses to be 87,500 annually. CMS has adjusted the annual estimated number of responses based on actual contractor data. The annual revised number is 87,265. The change to the annual burden is a mathematical calculation and the result of a decrease in the number of plan who offer private prescription drug coverage to Medicare-eligible individuals. There are no program changes.

Revisions to the Instructions and Screen Shots are set out in the Crosswalk and have no impact on prev burden estimates. Revisions are mostly for clarification, to remove redundancy, etc.

_{16. Publication/Tabulation Dates}

There are no publication or tabulation dates.

17. Expiration Date

_{CMS would like to display the expiration date.}

_{18. Certification Statement}

There are no exceptions to the certification statement.

_{B. Collections of Information Employing Statistical Methods}

Not applicable.

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