Practical Solutions for Managing the Coverage Gap Discount Program
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The document outlines the Coverage Gap Discount Program (CGDP) created by the Affordable Care Act to assist Medicare Part D beneficiaries by providing discounts on prescription drugs within the coverage gap, aiming to eliminate the gap by 2020. It discusses operational, financial, compliance, and legal challenges faced by manufacturers under the CGDP, alongside practical solutions for effective program management. Key points include the importance of data management, dispute resolution processes, and negotiating terms with Part D plans to mitigate financial risks and improve forecasting capabilities.
Practical Solutions for Managing the Coverage Gap Discount Program
- 1. Practical Solutions for Managing the Coverage Gap Discount Program
- 2. Shannon Bermudez Principal Consultant, Life Sciences http://www.linkedin.com/pub/shannon-bermudez/b/541/695 sbermudez@consultparagon.com
- 3. Coverage Gap Discount Program History The Affordable Care Act stipulated that the Coverage Gap or Donut Hole will be closed by 2020. • In 2010, CMS provided a $250 rebate to all Part D beneficiaries who entered the Coverage Gap. • As of January 1 2011, Part D beneficiaries who reached the Coverage Gap received a 50% discount on brand name drugs provided by the brand name drug manufacturers while in the Coverage Gap. This program is known as the Coverage Gap Discount Program (“CDGP”). • Through 2020, CMS will gradually phase in additional subsidies for generic and brand name drugs which will reduce Medicare Part D beneficiaries’ co-insurance rate in the “donut hole” from 100% to 25%. Visit us: http://www.consultparagon.com
- 4. Closing the “Donut Hole” 2011 - 2020 By 2020, the “donut hole” will be effectively eliminated and Medicare Part D beneficiaries will pay only a 25% cost-sharing for all drugs until reaching the Catastrophic Coverage threshold. Visit us: http://www.consultparagon.com Benefit Year Beneficiary Part D Plan Manufacturer 2011 50% - 50% 2012 50% - 50% 2013 47.50% 2.50% 50% 2014 47.50% 2.50% 50% 2015 45% 5% 50% 2016 45% 5% 50% 2017 40% 10% 50% 2018 35% 15% 50% 2019 30% 20% 50% 2020 25% 25% 50%
- 5. Coverage Gap Discount The Affordable Care Act mandated that manufacturers of Branded Drugs, Biologics and Authorized Generics provide Part D beneficiaries 50% discounts of the “negotiated price” of such drugs dispensed in the Coverage Gap (“Donut Hole”) in order for such drugs to be covered under Medicare Part D. • Based on “negotiated price,” minus dispensing fees and vaccine administrative fees. • Does not apply to Low Income Subsidy Beneficiary utilization, whose Donut Hole costs are paid by CMS. • Paid after a Part D Plan’s supplemental benefits • CMS can waive this requirement in its discretion • The product must be on the Part D Plan’s formulary, or approved under an exception. Visit us: http://www.consultparagon.com
- 6. Prominent Differences between CGDP & MDRP CGDP Pay and chase Visit us: http://www.consultparagon.com Not a guarantee of coverage Hundreds of plans vs. 50 states Rigid appeals process Payment level detail only available on audit No challenges for duplicate rebates (e.g., commercial, 340B) No price reporting No CPI-U inflation consideration
- 8. Who’s impacted by CGDP in your organization? Visit us: http://www.consultparagon.com Cross Functional Impact Contract Operations Responsible for overall CGDP admin. Finance Forecasting accruals and liability Managed Markets Negotiation of standard Part D agreements Potential terms around duplicate discounts Product Management Interest on cost to determine effects on product specific profitability Accounts Payable Sending EFT payments Maintenance of EFT information Accounts Receivable Track receipt of EFT payments for negative invoices from Plan Sponsors Information Technology Infrastructure to support CGDP admin.
- 9. CGDP High-Level Process Requirements The figure to the right illustrates the minimum high level requirements Manufacturers should have in place to support the administration & processing of CGDP payments. Visit us: http://www.consultparagon.com Data Management Requirements Data Receipt Invoice Data Management Detail Data Management EFT File Management Payment Requirements Maintain EFT banking info for 600+ contracts 38 day processing deadline Send EFT payments for 600+ contracts Reporting Requirements Payment Confirmation report Operational Reports Financial & Trend Reports Retain data for 17 quarters Negative Balance Solution Negative Invoice Reconciliation Report Maintain EFT info for receipt of Negative Invoice payments Receive EFT payments (Negative Invoices) Confirm receipt of negative invoice payments Dispute Resolution Mechanism to scrub & validate detail claims data Determine data elements to dispute Develop Dispute internal guidelines & polices
- 10. Operational Challenges Practical Solutions • Dedicate resources to specially manage CGDP operations • Define detailed process & timeline from receipt of data to payment due date • Automate processes as much as possible • Promote Cross functional Awareness, Involvement & Collaboration • Data storage & data repository • Build operational reporting capabilities Visit us: http://www.consultparagon.com Operational • Strict Mandated timelines • Resource Constraints • Maintenance of EFT information • Mgmt. of Negative Invoices
- 11. Financial Challenges Practical Solutions • Adhere to detailed process timeline to avoid payment penalty • Data storage & data repository – Build financial reporting capabilities to support financial analysis – Negotiate with Part D Plans to limit double dipping concerns Visit us: http://www.consultparagon.com Financial • 25% late payment penalty • Cash Flow • Forecasting limitations • Potential for double dipping
- 12. Compliance Challenges Practical Solutions • Define business rules, processes, and SOPs with control points for the overall operational process • Develop Dispute Business Rules & Process • Perform reasonability checks on data to support payment justification & additional financial analysis. • Monitor compliance with business rules, processes, and SOPs Visit us: http://www.consultparagon.com Compliance • Dispute process is pay and chase • Lack of data visibility • Challenge verifying CG Discount invoiced is correct • Strict Audit Guidelines
- 13. Legal Challenges Practical Solutions • Exhibit C of the Manufacturer Agreement with CMS restricts the use of claims-level data. • Permitted use- financial statement forecasting and accounting purposes. Visit us: http://www.consultparagon.com Legal • Restrictions on use of data • HIPAA Confidentially • Appeal Process
- 14. CGDP Risks to Manufacturer Operational • Strict Mandated timelines • Resource Constraints • Maintenance of EFT information • Mgmt. of Negative Invoices Visit us: http://www.consultparagon.com Financial • 25% late payment penalty • Cash Flow • Forecasting limitations • Potential for double dipping Compliance • Dispute process is pay and chase • Lack of data visibility • Strict Audit Guidelines Legal • Restrictions on use of data • HIPAA Confidentially • Appeal Process Risks across the organization
- 15. CGDP Primary Pain Points • Negative Balance Solution • Pay & Chase Dispute Resolution Process • Negotiating with Part D Plans to limit double dipping • Financial Forecasting & Predictive Analytics Visit us: http://www.consultparagon.com
- 17. Negative Balance Solution Impact on Business Process Visit us: http://www.consultparagon.com • Multiple reports • Manual Updates • Confirming payments in and out • Additional Processing • Same 38 day timeframe • Tracking Funds coming in • Tracking funds going out • Phase 1 & Phase2/Qtrly Invoice Process • Phase 2 & Standard Qtrly Invoice Process Processing Overlap EFT Funds Tracking Payment Confirmation Reports Resource & Time Constraints
- 18. How to manage the Negative Balance Solution Implement process to receive & translate Negative Balance Reports Evaluate file formats Determine process and/or system changes Implement applicable changes Implement process to receive funds Set–up account to receive funds from Provide applicable EFT banking information to TPA Ensure A/R system is equipped to receive EFT funds for CGDP payments Implement A/R process to track receipt of funds Sponsors via EFT Identify & allocate A/R resources Create reports to support tracking Define overall A/R process, process timeline & SLA to track receipt of funds Implement process to Confirm receipt of funds Confirm payments received for negative invoices Visit us: http://www.consultparagon.com Confirm payments not received for negative invoices Confirm payments made for positive invoices Implement Reconciliation Process Funds expected vs. actual funds received Internal tracking vs. TPA tracking Summarize & report variances
- 19. Dispute Process
- 20. Tips for Preparing for the Dispute Resolution Process • Must have mechanism to scrub & validate data for disputes • Determine data elements & validations to dispute • Develop Dispute internal guidelines & polices • Ability to prepare dispute report in CMS defined format • Understand Dispute Process Timeline & Audit Rights • Time exercise of audit right to maximize chances of success during appeal Visit us: http://www.consultparagon.com
- 21. Data Items Eligible for Dispute per CMS Visit us: http://www.consultparagon.com Pay & Chase Dispute Items • Duplicate Invoice Item (D01) • Closed Pharmacy (D02) • Not Part D Covered Drug (D03) • Excessive Quantity (D04) • Days’ Supply (D05) • High Price of the Drug (D06) • Last Lot Expiration Date (D07) • Early Fill (D08) • Marketing Category is Not NDA or BLA (D09) • Date of Service Prior to 1/1/2011 (D10) • PDE Improperly Invoiced Beyond Manufacturer Agreement Invoice Period (D11) • Invalid Prescription Service Reference Number (D12) • Other (D99) 340B Pharmacy Disputes Maximum Gap Discount Disputes Employer Group Waiver Plans (EGWPs) Invoice corrections for incorrect labeler billings can be submitted within 5 days of receipt of invoices. All other disputes items are pay & chase.
- 22. Dispute Resolution Timeline Extensive Dispute Resolution Timeline in upwards of 210 days. • Disputes must be submitted to the TPA in writing within 60 days of receipt of the applicable invoice. • The TPA must use its best efforts to work with the Manufacturer to resolve these disputes within 60 days of the notice. • If the TPA and the manufacturer fail to resolve the dispute within 60 days of the notice, CMS will specify an entity to perform an independent review of the dispute. • This review will be completed within 90 days of receipt of request by manufacturer for an independent review. • Upon an unfavorable decision, manufacturer may request CMS Administrator review w/I 30 days after receipt of such determination. Visit us: http://www.consultparagon.com
- 23. Manufacturer Audit Rights Manufacturer can audit TPA’s data annually. • Audit commenced on 60 days notice. Must include: • Reasonable basis for the audit; and • Description of the information required for the audit. • Review limited to a “statistically significant sample size of PDEs.” • No audit of CMS records. • Records are confidential and reviewed on-site. Visit us: http://www.consultparagon.com Data elements subject to audit are: • Contract Number • Plan Benefit Package Identifier • Ingredient Cost Paid • Dispensing Fee Paid • Total Amount Attributed to Sales Tax • Low-Income Cost Sharing Amount • Non-covered Plan Paid Amount • Vaccine Administration Fee • Total Gross Covered Drug Cost Accumulator • True Out-of-Pocket Accumulator
- 24. Negotiating with Part D Plans
- 25. Limit Double Dipping by Negotiating with Part D Plans Data Requirements • Consider a clause requiring Part D Plan cooperation in gathering information that could be useful in a dispute (subject to HIPAA limitations). • Require Benefit Stage Qualifier of NCPDP standard be valued in standard Part D rebate submissions. Terms • Pursue terms to carve out double rebates, but Part D Plans not required to agree. • Negotiate terms that will allow for the scrubbing out of claims that are identified as falling in the Coverage Gap Benefit Stage. Visit us: http://www.consultparagon.com
- 26. Maximizing Data for Financial Analytics
- 27. Maximizing CGDP Data for Financial Analytics What’s my total CGDP liability overtime qtr/qtr & yr/yr ? Visit us: http://www.consultparagon.com What’s my CGDP liability by product & how’s it trending? How are Part D lives growing? What am I owed for negative invoices?
- 28. Maximizing CGDP Data for Financial Analytics How to get there? • Understand all aspects of Coverage Gap data you are receiving • Create data repository for data storage for reporting & trend analysis overtime. • Build Operational & Financial Reporting capabilities • Build Scrubbing capabilities Visit us: http://www.consultparagon.com
- 29. Maximizing CGDP Data for Financial Analytics What to look for? • Perform validation checks and review data for applicable disputes acceptable by CMS. • Use detail data to report by NDC to provide visibility to finance for forecasting, accruals ,GTN purposes and breakout of U.S. vs. Puerto Rico. • Perform additional analysis on detail data using calculation algorithms to evaluate for reasonableness. • Innovative approaches to evaluating data that is available to do more advanced analysis. • Link data between EFT file and invoice file to summarize estimate by plan sponsor and region. Visit us: http://www.consultparagon.com
- 30. CGDP Business & Technical Process Flow Visit us: http://www.consultparagon.com
- 31. For information, visit: http://www.consultparagon.com s b e rmu d e z@c o n s u l t p a r a g o n . c om
Editor's Notes
- #4: Speaker: Jim Kane This slide covers all the pieces of SharePoint. SharePoint exists on premises as well as in the cloud. Regardless of the path you choose these functions are available in either scenario. **Change Slide**
- #5: Speaker: Robert Heiden In order to properly put your arms around your projects, programs or portfolio there are three key pillars which need to be addressed right out of the gate. These pillars function as the basic girders by which you will build future success. That is not to say that these items will not change and evolve as your organization matures, they will. These pillars address the following: Why are we working on this? – strong business case to obtain agreement on what you are doing How are we doing? – Status Reporting to track progress What are we doing? – The ability to manage change against the agreed upon scope All of the features, improvements and functionality we find in SharePoint 2013 will be mapped back to supporting these pillars. **Change Slide**
- #6: Speaker: Robert Heiden There is an evolution and we can use SharePoint to start off with. As you mature with your project management techniques you can use a lot of different tools, but basic SharePoint can help you frame out how to effectively manage your projects, if properly constructed. It is our expertise as a company to help you make those simple choices to ensure that you set yourself up for a successful future. During the course of this webinar we will be discussing how you can use Microsoft SharePoint 2013 to effectively manage your projects. SharePoint 2013 offers many new options and improvements to increase adoption and allow for a streamlined setup. Most importantly the platform is presented in a way that allows you to mature and grow without throwing away previous work. A simple task list can expand into a fully functional PPM solution. Some simple analysis is needed to identify key data points. Begin with the end in mind. If you have a project code, for example, that code should be replicated across all of your lists and libraries using a site level custom field. This should be the basis of your taxonomy. As you build out the taxonomy and layer that into the built in SharePoint lists, you start to build out the consistency that is required. **Change Slide**
- #7: Speaker: Robert Heiden You can manage your documents with versioning, check out, check in. This can function as a central repository for all the documents that manage the business case (i.e., financial calculations). You can leverage content types that represent a standardized business case. Depending on what schema you use, and this is where the flexibility comes in, you can have one library for all projects or one per project. The security model previously defined would drive your decisions here. SharePoint can be expanded by the scale of your organization and you can take this framework and apply it to the other lists we will discuss in this presentation. **Change Slide**
- #8: Transition slide
- #9: Speaker: Robert Heiden Team members can be notified of task assignments via email, which removes the burden from the Project Manager to notify assignments. Alerts (i.e., notifications) of item changes can let team members know when their assignments have been altered. Also alerts can be used for team broadcasts sending daily or weekly summaries to the entire team of altered tasks. Animation 1- Task Indentation – now provides a hierarchal view of task relationships Animation 2- Mark complete with checkbox – quickly enables team members to update status Animation 3- Strikethrough – provides an “at a glance” view showing anything that is completed Animation 4- Lync Integration – facilitates communication to quickly gain the latest updates Animation 5- Date Formatting – offers dates in a friendlier format for end users The platform is dynamic yet simple enabling users to rapidly add tasks. **Change Slide**
- #10: Speaker: Robert Heiden The new Project Summary web part flips between the Timeline view and Overdue tasks. Animation 1- The Project Summary web part shows a carousel easily switching between upcoming/late tasks and the overall project timeline. This can be added to different pages of your SharePoint site **Change Slide**
- #11: Speaker: Robert Heiden To improve the adoption rate for such a change there are multiple ways to interact with team members. In order to buffer end users from MS Project (which we all know and love) multiple methods exist for communicating task status. Including SharePoint task lists, Outlook, and Excel. This integration can be done without any programming or specialized IT skills. This increases the likelihood of individuals providing the project managers with their task updates since they do not need to interact with Microsoft Project. **Change Slide**
- #12: Speaker: Robert Heiden So now lets talk about pulling these things together. The taxonomy defined earlier provides us with the framework for grouping or associating the various SharePoint list items with the projects that they are associated with. Scenario 1 – a single registry for multiple projects we can group a list by project ID and you can see all the risks or issues or changes associated with that particular project Scenario 2 – an individual registry for a project and group items by priority to view all high priority item, group by assigned to resource. The foundation is now established for continuous improvement. These lists are now searchable for future projects facilitating lessons learned. **Change Slide**
- #13: Speaker: Robert Heiden One of the most powerful aspects here is the ability to sort and group in the views creating reports that align to the steps of your processes (i.e., creation, status, reporting and lessons learned) **Change Slide**
- #14: Speaker: Robert Heiden Increase the transparency and insight into the organization is easily done via these views. All of this information can be shared with team members, executives and stakeholders in a manner that they require. This is the first iteration of the single truth, now you are establishing consistency across the platform that is scalable in that it can easily manage as many projects as you require. Animation 1- There are a number of different ways to view your data within SharePoint 2013. Whether you are looking at a calendar, single item view, a gantt chart or a timeline the information can be presented to your end users in a meaningful way. **Change Slide**
- #15: Speaker: Robert Heiden **Animations on this slide are timed with a single click** Thanks Stephen… The examples we have shown you throughout this presentation are applicable, to varying degrees, to all stages of your PMO evolution. An alternative scenario may be to have your project task lists separate but keep your documents, risk issues and changes consolidated. This scenario would allow project managers to sync projects with Microsoft Project Professional to have more robust project schedules. As you expand or depending on your current size you may want to consider a site per program or a site per business unit. In this scenario you can leverage the foundation described today across these sites. You can then leverage web parts and other techniques to bring that information back together in a single place for reporting. In future webinars we will show you how you can quickly and easily report on tagged items across sites. An example being a view of all high priority lists. Finally as you move into a more robust scenario you would want to consider a PPM tool such as project server or leverage the foundation to simply have separate project sites. Reporting across those sites and maintaining consistency via list, library and site templates. **Change Slide**
- #16: Speaker: Robert Heiden Here we see how this approach ties into Microsoft’s PPM journey. We have focused on the task management and project collaboration area. In future webinars we will move along this curve and describe how you can eventually leverage Project Server without your teams keeping the SharePoint front end. In Project Server 2013 you have the ability to import the same SharePoint task list we just demonstrated into the enterprise for visibility in PPM reporting. **Change Slide**
- #17: Transition slide
- #18: Speaker: Robert Heiden Here we see how this approach ties into Microsoft’s PPM journey. We have focused on the task management and project collaboration area. In future webinars we will move along this curve and describe how you can eventually leverage Project Server without your teams keeping the SharePoint front end. In Project Server 2013 you have the ability to import the same SharePoint task list we just demonstrated into the enterprise for visibility in PPM reporting. **Change Slide**
- #19: Speaker: Robert Heiden Here we see how this approach ties into Microsoft’s PPM journey. We have focused on the task management and project collaboration area. In future webinars we will move along this curve and describe how you can eventually leverage Project Server without your teams keeping the SharePoint front end. In Project Server 2013 you have the ability to import the same SharePoint task list we just demonstrated into the enterprise for visibility in PPM reporting. **Change Slide**
- #20: Transition slide
- #21: Speaker: Robert Heiden Here we see how this approach ties into Microsoft’s PPM journey. We have focused on the task management and project collaboration area. In future webinars we will move along this curve and describe how you can eventually leverage Project Server without your teams keeping the SharePoint front end. In Project Server 2013 you have the ability to import the same SharePoint task list we just demonstrated into the enterprise for visibility in PPM reporting. **Change Slide**
- #22: Speaker: Robert Heiden Here we see how this approach ties into Microsoft’s PPM journey. We have focused on the task management and project collaboration area. In future webinars we will move along this curve and describe how you can eventually leverage Project Server without your teams keeping the SharePoint front end. In Project Server 2013 you have the ability to import the same SharePoint task list we just demonstrated into the enterprise for visibility in PPM reporting. **Change Slide**
- #23: Speaker: Robert Heiden Here we see how this approach ties into Microsoft’s PPM journey. We have focused on the task management and project collaboration area. In future webinars we will move along this curve and describe how you can eventually leverage Project Server without your teams keeping the SharePoint front end. In Project Server 2013 you have the ability to import the same SharePoint task list we just demonstrated into the enterprise for visibility in PPM reporting. **Change Slide**
- #24: Speaker: Robert Heiden Here we see how this approach ties into Microsoft’s PPM journey. We have focused on the task management and project collaboration area. In future webinars we will move along this curve and describe how you can eventually leverage Project Server without your teams keeping the SharePoint front end. In Project Server 2013 you have the ability to import the same SharePoint task list we just demonstrated into the enterprise for visibility in PPM reporting. **Change Slide**
- #25: Transition slide
- #26: Speaker: Robert Heiden Here we see how this approach ties into Microsoft’s PPM journey. We have focused on the task management and project collaboration area. In future webinars we will move along this curve and describe how you can eventually leverage Project Server without your teams keeping the SharePoint front end. In Project Server 2013 you have the ability to import the same SharePoint task list we just demonstrated into the enterprise for visibility in PPM reporting. **Change Slide**
- #27: Transition slide
- #28: Speaker: Robert Heiden Here we see how this approach ties into Microsoft’s PPM journey. We have focused on the task management and project collaboration area. In future webinars we will move along this curve and describe how you can eventually leverage Project Server without your teams keeping the SharePoint front end. In Project Server 2013 you have the ability to import the same SharePoint task list we just demonstrated into the enterprise for visibility in PPM reporting. **Change Slide**
- #29: Speaker: Robert Heiden Here we see how this approach ties into Microsoft’s PPM journey. We have focused on the task management and project collaboration area. In future webinars we will move along this curve and describe how you can eventually leverage Project Server without your teams keeping the SharePoint front end. In Project Server 2013 you have the ability to import the same SharePoint task list we just demonstrated into the enterprise for visibility in PPM reporting. **Change Slide**
- #30: Speaker: Robert Heiden Here we see how this approach ties into Microsoft’s PPM journey. We have focused on the task management and project collaboration area. In future webinars we will move along this curve and describe how you can eventually leverage Project Server without your teams keeping the SharePoint front end. In Project Server 2013 you have the ability to import the same SharePoint task list we just demonstrated into the enterprise for visibility in PPM reporting. **Change Slide**
- #31: Speaker: Robert Heiden Here we see how this approach ties into Microsoft’s PPM journey. We have focused on the task management and project collaboration area. In future webinars we will move along this curve and describe how you can eventually leverage Project Server without your teams keeping the SharePoint front end. In Project Server 2013 you have the ability to import the same SharePoint task list we just demonstrated into the enterprise for visibility in PPM reporting. **Change Slide**
- #32: Speaker: Erik Johnson