Prescription Drug Events (PDEs)Are submitted by Part D plan sponsors.On each PDE, the plan reports theactual amount of gap discount paid forthe dispensing event in the ReportedGap Discount field.PDE submissions are subjected to arigorous set of over 150 edits.
More Details on PDE Submission Available at www.mcoservice.com
Manufacturer Quarterly Invoice Process CMS aggregates Gap Discount amounts reported on PDE data and performs a validation analysis. CMS then sends this information to Palmetto GBA, the Third Party Administrator (TPA) for the CGDP. The TPA sends quarterly invoice reports to manufacturers and Part D sponsors simultaneously. Manufacturers are required to pay the invoiced amount in full to the Part D sponsors within 38 days of report distribution.
Count of PDEs Invoiced by Quarter, 2011 19,555,000 1,706,000 4,675,000 136,000 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Rounded to the nearest thousand
2011 Invoiced Amounts by Quarter $1,556,676,000 $394,864,000 $174,106,000$50,687,000 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Rounded to the nearest thousand
Dispute ResolutionManufacturers have the right to disputeinvoices within 60 days of receipt.CMS will deny disputes if the discountpayment is accurately calculated basedupon accurate data for dispensingevents that actually occurred.
Dispute ReasonsDISPUTE REASON CODE DISPUTE REASON DESCRIPTION D01 Duplicate Invoice Item D02 Closed Pharmacy D03 Not PART D Covered Drug D04 Excessive Quantity D05 Invalid Days Supply D06 High Price of the Drug D07 Last Lot Expiration Date D08 Early Fill D09 Marketing Category is not NDA or BLA D10 Date of Service prior to 01/01/2011 D11 PDE improperly invoiced beyond Manufacturer Agreement Invoice period D12 Invalid Prescription Service Reference Number D99 Other
Q1 – Q3 Disputes by Reason Code, 2011100%80%60%40%20% 0% Q1 % Q2 % Q3 % D03 - Not PART D Covered Drug D09 - Marketing Category is not NDA or BLA D04 - Excessive Quantity All others D01 - Duplicate Invoice Item
Denied and Upheld Disputes To date, 99% of disputes have beendenied.Most of the upheld disputes have beenin the “Excessive Quantity” category.
Disputes Should Be Based Upon Part D Policy Onlywww.cms.gov/PrescriptionDrugCovContra/12_PartDManuals.asp#TopOfPage
Part D Benefit Designs2012 Defined Standard Benefit for Applicable Drugs
Part D Benefit Designs (cont.)The defined standard (DS) benefits is used my onlyaround 10% of Prescription Drug Plans.Other benefit designs may: Substitute the DS co-insurance, with tiered co-pay structures tied to plan formularies or preferred pharmacies in a plan’s network. May have reduced deductible or a modification to the initial coverage limit. May, for an additional premium, have reduce cost sharing and/or have coverage of non-Part D drugs.
Common Reasons CMS Denies Disputes Duplicate Invoice Item: Most disputes of duplicates have turned out to be a situation where an adjustment to a previously invoiced PDE has been submitted. This is not a true duplicate. Closed Pharmacy: Edits are performed on PDEs to confirm that a pharmacy was open on the Date of Service (DOS) based up0n NCPDP data. We have observed instability in the data where a pharmacy is reported as closed then later that information is corrected to show a continuous open period. Because of this, CMS allows a six month grace period following the DOS.
Reasons CMS Denies Disputes(cont.)Not Part D Covered Drug: Often incorrectlydisputed as Medicare Part B versus Part D.Excessive Quantity and Days Supply: These typesof disputes should represent inappropriate amountsnot clinically acceptable variations from the label.High Price of the Drug: Part D negotiated prices arenot specifically connected to common list prices orprices from other government programs.Maximum Gap Discount Disputes: Oftencalculated based on a defined standard benefit, butmost Part D plans use other benefit designs.
Reasons CMS Denies Disputes(cont.)340B Pharmacy Disputes: Part D sponsors mayinclude 340B pharmacies in their networks. The PartD negotiated price is not necessarily the 340Bpharmacy acquisition cost.Marketing Category is Not NDA or BLA and LastLot Expiration Date: We have found disputes herethat are not tied to the actual FDA e-listing as of thedate of service for the PDE. Retroactive listingchanges will not impact PDEs invoiced before thechanges were made.