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CMS Updates the Part D Prescription Drug Benefit Manual – Chapter 13 & 14

Last month, CMS updated Chapters 13 and 14 from the Part D Prescription Drug Benefit Manual (PDBM). These updates affect Part D plan sponsor operations as well as network and non-network pharmacies. In Chapter 13, CMS updated its guidance on premium and cost sharing subsidies for low-income beneficiaries under the Part D program. In Chapter 14, CMS updated its guidance on coordination of benefits. A selection of CMS’s updates to those chapters are highlighted below:

Chapter 13 – Premium and Cost-Sharing Subsidies for Low-Income Individuals (updated September 14, 2018)

  • Updates guidance on the months’ and less than a month’s supply and the related application of the daily cost-sharing rule.

  • Makes minor modifications to guidance on refunds and recoupments of cost-sharing and premium amounts.

  • Updates the process for plan sponsors to seek Best Available Evidence documentation on behalf of the beneficiaries.

Chapter 14 – Coordination of Benefits (updated September 17, 2018)

  • Liberalizes the plan notification requirements to give plan sponsors flexibility to design the Coordination of Benefits (COB) notification process so long as a new enrollee COB letter and annual letter is delivered, if warranted.

  • Clarifies situations when cash purchases for covered Part D drugs is reasonable, such as when a pharmacy offers discounted prices through “loyalty programs or pharmacy coupons” that are not subsidized by purchases of drugs covered by Part D.

  • Clarifies plan sponsor’s responsibility for adjudicating enrollee claims in accordance with Medicare Secondary Payer (MSP) requirements, and for identifying and recovering and any Coordination of Benefits, MSP-related mistaken payments and submitting associated adjustments to CMS.

  • Updates guidance on HIPAA business associate agreements in compliance with the 2013 changes to the HIPAA Privacy Rule, and encouraged plan sponsors to execute the CMS Part D Transaction Facilitator BAA without modifications (unless required by state regulations).

  • Updates guidance on plan sponsors use of Additional Beneficiary Information Initiatives when making Part B and D coverage determinations. This follows CMS’s announcement in the 2019 Final Call letter.

The updated chapters can be found on the CMS website.

© Copyright 2022 Squire Patton Boggs (US) LLPNational Law Review, Volume VIII, Number 283
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Squire Patton Boggs's Healthcare Industry Group provides exceptional legal, regulatory, transactional, legislative and strategic counsel on a wide range of industry issues to healthcare-related entities around the globe. Their transactional specialists have completed hundreds of deals across the industry, ranging from company formation, to mergers, acquisitions, and divestitures, and from corporate, public or project finance matters, through to workouts. Their litigators have extensive experience advocating for their clients in courts and arbitrations across the nation and have helped to...

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