CMS ISSUES FINAL DRUG MANUFACTURER AGREEMENTS FOR COVERAGE GAP DISCOUNT PROGRAM TO ELIGIBLE MEDICARE PART D BENEFICIARIES
Agreement to Implement Next Steps in Closing Medicare Donut Hole
The Centers for Medicare & Medicaid Services (CMS) today issued the agreement that drug manufacturers will use to provide savings of about 50 percent on brand name drugs and biologics for people with Medicare Part D who hit the Part D drug benefit coverage gap, or “donut hole,” in 2011.
“These agreements implement important provisions of the Affordable Care Act to close the donut hole over the next ten years that will result in significant savings to beneficiaries when they buy their drugs at their local pharmacies or through mail order,” said Jonathan Blum, deputy administrator for CMS’ Center for Medicare.
Based on comments CMS received from manufacturers, advocates and Part D sponsors, CMS revised the manufacturer agreement to provide additional time for quarterly invoice payments by manufacturers to plan sponsors within 38 days of receipt through the Third Party Administrator (TPA). This is consistent with the reimbursement schedule used in the Medicaid Drug Rebate Program. CMS is also providing manufacturers with claims level data necessary to validate invoices, without sharing private patient information. The final agreement ensures that beneficiary information will continue to be protected in the same manner as it’s protected now.
Drug manufacturers are required to sign these agreements by Sept. 1, 2010, to be able to continue to offer drugs under the Medicare Part D program. CMS will coordinate the manufacturers’ reimbursement to the Part D plan sponsor through Palmetto GBA, LLC, the TPA contractor. Payment inconsistencies or conflicts raised by manufacturers will follow a dispute resolution and appeal process as outlined in the agreement. CMS will also perform extensive editing on payment data to ensure that beneficiaries and plans receive appropriate discounts and payments.
“CMS has carefully reviewed the comments we received on our draft agreement language. We believe our final language is responsive to the comments and we expect all brand name manufacturers to sign,” Blum said.
Closing the coverage gap is an important part of the Affordable Care Act signed by President Obama earlier this year, beginning with a one-time check for $250 for Medicare beneficiaries who reach the coverage gap in 2010 but are not eligible for low-income assistance. In 2011, Medicare beneficiaries will see savings from the roughly 50 percent discount for brand-name drugs and biologics and coverage of generic drugs in the coverage gap. And beginning in 2011, the coverage gap will begin to decrease incrementally until it is eliminated by 2020.
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