CMS-10147 - Supporting Statement A

Supporting Statement Part A

Medicare Prescription Drug Coverage and Your Rights

CMS-10147, OMB 0938-0975

Background

Section 423.562(a)(3) and an associated regulatory provision at § 423.128(b)(7)(iii) require that Part D plan sponsors’ network pharmacies provide Part D enrollees with a printed copy of our standardized pharmacy notice “Medicare Prescription Drug Coverage and Your Rights” (hereafter, “notice”) if an enrollee’s prescription cannot be filled.

We do not propose to revise the notice other than to update the date of expiration. We are revising our burden estimates based on calendar year (CY) 2018 Public Use File and prescription drug event data.

A. Justification

1. Need and Legal Basis

The purpose of this notice is to provide enrollees with information about how to contact their

Part D plans to request a coverage determination, including a request for an exception to the Part D plan’s formulary. The notice reminds enrollees about certain rights and protections related to their Medicare prescription drug benefits, including the right to receive a written explanation from the drug plan about why a prescription drug is not covered. Through delivery of this standardized notice, a Part D plan sponsor’s network pharmacies are in the best position to inform enrollees at point of sale about how to contact their Part D plan if the prescription cannot be filled.

Statutory/Regulatory Basis

§ 1860D-4(g)(1) – A Part D plan sponsor shall provide coverage determination and redetermination procedures with respect to covered prescription drug benefits offered by the plan.

§ 423.562(a)(3) –A Part D plan sponsor must arrange with its network pharmacies to distribute notices instructing enrollees to contact their plans to obtain a coverage determination or request an exception if they disagree with the information provided by the pharmacist.

§ 423.128(b)(7)(iii)–Network pharmacies must provide a printed notice at the point-of-sale to an enrollee explaining how the enrollee can contact the plan and request a coverage determination.

2. Information Users

Through the notice, Medicare beneficiaries who are enrolled in a Part D plan will be informed of their right to request a coverage determination (including an exception) and will be better able to access their Medicare prescription drug benefits.

2. Use of Information Technology

Part D plans and their network pharmacies are free to take advantage of any information technology they find appropriate for their business operations in order to meet this requirement.

2. Duplication of Efforts

This information collection is not duplicative of another collection.

2. Small Businesses

There is no significant impact on small businesses. The notice requirement is fulfilled by the pharmacy providing the enrollee with the notice.

2. Less Frequent Collection

There are no opportunities for less frequent collection. Each time an enrollee’s prescription cannot be filled under the Part D benefit and the issue cannot be resolved at the point of sale, the network pharmacy is responsible for providing the enrollee this notice. Failure to provide the enrollee with a copy of the notice at the pharmacy if the prescription can’t be filled may result in enrollees being uninformed of important due process rights. The pharmacist can’t issue a coverage determination on behalf of the plan.

2. Special Circumstances

There are no special circumstances that would require an information collection to be conducted in a manner that requires respondents to:

• Report information to the agency more often than quarterly;

• Prepare a written response to a collection of information in fewer than 30 days after receipt of it;

• Submit more than an original and two copies of any document;

• Retain records, other than health, medical, government contract, grant-in-aid, or tax records for more than three years;

• Collect data in connection with a statistical survey that is not designed to produce valid and reliable results that can be generalized to the universe of study,

• Use a statistical data classification that has not been reviewed and approved by OMB;

• Include a pledge of confidentiality that is not supported by authority established in statute or regulation that is not supported by disclosure and data security policies that are consistent with the pledge, or which unnecessarily impedes sharing of data with other agencies for compatible confidential use; or

• Submit proprietary trade secret, or other confidential information unless the agency can demonstrate that it has instituted procedures to protect the information's confidentiality to the extent permitted by law.

8. Federal Register/Outside Consultation

The 60-day notice published in the Federal Register 1/14/2021 (86 FR 3159).

No comments were submitted.

The 30-day notice published in the Federal Register 3/25/2021 (85 FR 15943 ).

8. Payments/Gifts to Respondents

Neither Part D plans nor pharmacies will receive any payment or gifts related to issuance of this notice.

8. Confidentiality

No assurances for confidentiality are necessary as data are not being collected.

8. Sensitive Questions

There are no sensitive questions associated with this collection. Specifically, the collection does not solicit questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private.

8. Burden Estimates (Hours & Wages)

Wages

To derive average costs, we used data from the U.S. Bureau of Labor Statistics’ May 2019

National Occupational Employment and Wage Estimates for all salary estimates

(http://www.bls.gov/oes/current/oes_nat.htm). In this regard, the following table presents the mean hourly wage, the cost of fringe benefits (calculated at 100 percent of salary), and the adjusted hourly wage.

Occupation Title	Occupation Code	Mean Hourly Wage ($/hr)	Fringe Benefit ($/hr)	Adjusted Hourly Wage ($/hr)
Pharmacy Technician	29-2052	$16.95	$16.95	$33.90

As indicated, we are adjusting our employee hourly wage estimates by a factor of 100 percent. This is necessarily a rough adjustment, both because fringe benefits and overhead costs vary significantly from employer to employer, and because methods of estimating these costs vary widely from study to study. Nonetheless, there is no practical alternative and we believe that doubling the hourly wage to estimate total cost is a reasonably accurate estimation method.

Burden Estimates

We estimate that the burden associated with the requirement to distribute the standardized pharmacy notice, entitled Medicare Prescription Drug Coverage and Your Rights, is 1 minute (0.01666 hour) per enrollee. We believe that because such delivery is an administrative function, a pharmacy technician would generally be the person distributing the notice, not the pharmacist. Assuming that the staff person distributing the notice will most likely be a pharmacy technician, we are using an adjusted wage of $33.90/hr to calculate costs.

Based on the most recent data from CY 2018 Public Reporting File (PUF) data, the number of filled prescriptions in 2018 was 2,273,087,520 and the number of rejected pharmacy transactions in 2018 was 82,802,153. These rejected pharmacy transaction data are comprised of four different rejection scenarios, all of which cause the standardized pharmacy notice to be returned. Therefore, our estimate is that all of these rejected pharmacy transactions would require the beneficiary to receive a notice. However, we estimate that 40% of rejected pharmacy transactions are resolved at point of sale. These resolutions could be attributed to a phone call to the prescriber to obtain a system override, or could be due to data entry error. Based on this 40% resolution assumption, we are estimating that 49,681,292 notices will be issued annually.

Assuming an average time per response of 1 minute (0.01666 hour) we estimate a total annual burden of 827,690 hours (0.01666 hours x 49,681,292 notices) at a cost of $28,058,691 ( 827,690 hr x $33.90/hr).

For each respondent/pharmacy we estimate an annual burden of 12 hours per pharmacy per year (827,690 hrs / 70,000 pharmacies) at a cost of $ 400.84 per pharmacy per year ($28,058,691 / 70,000 pharmacies).

Information Collection/Reporting Instruments and Instruction/Guidance Documents

• Instructions for the standardized pharmacy notice “Medicare Prescription Drug Coverage and Your Rights”

• Medicare Prescription Drug Coverage and Your Rights (English)

• Medicare Prescription Drug Coverage and Your Rights (Spanish)

We are keeping the 2017-approved version in this submission. We are excluding the revised Spanish version from this 2020 iteration due to our belief that the best use of the agency’s limited translation resources is to wait until after OMB approves a notice (in English) before translating that notice into another language. At that time the Spanish version will be provided to OMB as a non-substantive change.

13. Capital Costs

There are no capital costs.

13. Cost to Federal Government

There are no direct costs to the Federal government for the distribution of the notice by Part D plans’ network pharmacies.

13. Changes to Burden

The annual hourly burden associated with this collection is estimated to be 827,690 hours. The annual hourly burden in the 2016 PRA submission for this collection was 668,066 hours. The 159,624 hour increase in burden is an adjustment that is based on the increased number of applicable pharmacies (+8,000 pharmacies) and the increased number of standardized pharmacy notices (+9,581,292 notices) that are likely to be distributed based on using more accurate CY 2018 Public Use File and prescription drug event data.

We are also adjusting our cost estimates based on current BLS wage data for pharmacy technicians. In this iteration, we are doubling that wage to account for burden and overhead.

13. Publication/Tabulation Dates

CMS does not intend to publish data related to the notices.

13. Expiration Date

The expiration date is displayed in the bottom right hand corner of the notice.

13. Certification Statement

There are no exceptions to the certification statement.

B. Collection of Information Employing Statistical Methods

This collection does not employ statistical methods.

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