Response to Public Comment

CMS Response to Public Comments
OMB # 0938 - 0944
CMS-10142
Bid Pricing Tool (BPT) for Medicare Advantage and Prescription Drug
Plans
A 60-day Federal Register notice was published on September 26, 2014, Vol. 79, No.
187, pg 57931-57932. There was one public comment received from the publication
of the 60-day notice.
Comment 1, Alison Hanson, Health Partners:
General Comment
We appreciate the opportunity to comment on the 2016 BPTs. Our comments are
regarding the MA and Part D BPT instructions. We ask that CMS consider expanding the
allowable demonstrations of the independence of related parties through the market
comparison to allow for tests that demonstrate the related-party's pricing is within a range
established by two other unrelated parties. Currently, related party testing requirements
require a market comparison demonstration to be within 5% of a single unrelated party.
For our Part D program, we have a related party arrangement with our #1 ranked
pharmacy based on the number of scripts filled. We produced a market comparison that
demonstrated our related party pricing was 17% lower than our 2nd ranked pharmacy and
9% higher than our 3rd ranked pharmacy. Our test was not compliant with the bid
instructions because it was not within 5% of either of those contracts despite being
between them. We believe our test demonstrated that our arrangement:
1. Is not significantly different from the financial arrangements that would have been
achieved in the absence of the relationship and
2. Does not provide the opportunity to over- or under- subsidize the bid.
As our initial test demonstrated, actual pricing variation in the pharmacy market greatly
exceeds the 5% threshold established by the Part D BPT instructions. Our test showed a
25% pricing variation between 2 large unrelated pharmacies. We would encourage CMS
to consider this reality in future rulemaking.
Thank you for considering our comments.
My email for follow up questions: [email protected] (the email data
field did not accept my email as valid)
CMS Response to Comment:

We will consider this comment as we continue to revise the CY2016 BPT instructions.