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Medicare Part D Employer Group Waiver Plans (EGWPs) - PowerPoint PPT Presentation

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Medicare Part D Employer Group Waiver Plans (EGWPs). Mark Newsom, Director Division of Payment Reconciliation/ Medicare Plan Payment Group. Social Security Act.

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Medicare part d employer group waiver plans egwps

Medicare Part D

Employer Group Waiver Plans (EGWPs)

Mark Newsom, Director

Division of Payment Reconciliation/ Medicare Plan Payment Group

Social security act
Social Security Act

  • Section 1860D-22(b) of the Social Security Act (the “Act”), establishes that Medicare Advantage Waiver Authority under section 1857(i) shall apply to prescription drug coverage in employee retiree plans.

  • The authority allows CMS to waive or modify any requirements that hinder the design of, the offering of, or the enrollment in employer plans.

Coverage gap discount program applies to egwps
Coverage Gap Discount Program Applies to EGWPs

  • EGWPs are included in the Discount Program because the definition of “applicable beneficiary” in §1860D-14A(g)(1) of the Social Security Act covers all Part D plan enrollees not eligible for a low income subsidy. There is no exclusion for EGWPs.

Restricted enrollment
Restricted Enrollment

  • All EGWPs must restrict enrollment to employer/union group health plan Part D eligible retirees and/or their Part D eligible spouses and dependents.

Key approved employer union sponsored group health plan waivers
Key Approved Employer/Union Sponsored Group Health Plan Waivers

  • CMS has waived the annual coordinated election period described in 42 CFR 423.38(b) for EGWPs. Thus, enrollments in EGWPs or individual PDPs may have different annual open enrollment periods(non-calendar year EGWPs).

  • CMS has waived the prior review and approval requirements for most marketing materials.

Key approved employer union sponsored group health plan waivers cont
Key Approved Employer/Union Sponsored Group Health Plan Waivers (Cont.)

  • Uniform benefits waiver: EGWP entities serving multiple regions or the entire nation are allowed to vary premiums and cost sharing between defined market areas within the same employer/union sponsored group plan.

  • CMS has waived the specific Part D retail pharmacy access standards contained in 423.120(a)(1) as long as the EGWP sponsor attests that its networks are and will continue to be sufficient to meet the needs of its Part D eligibles, including situations involving emergency access.

Information provided to cms about part d from egwps
Information Provided to CMS about Part D from EGWPs

  • 42 CFR § 423.48   Information about Part D is waived: Each Part D plan must provide, on an annual basis, and in a format and using standard terminology that CMS may specify in guidance, the information necessary to enable CMS to provide to current and potential Part D eligible individuals the information they need to make informed decisions among the available choices for Part D coverage.

  • These data are used for the Medicare Prescription Drug Plan Finderweb tool and the Medicare & You publication.

Information provided to cms about part d from egwps cont
Information Provided to CMS about Part D from EGWPs (cont.)

  • Waivers are in place for much of the detail provided in the bids, benefit packages, and formularies submitted by non-EGWP Part D sponsors.

Traditional egwp benefit packages
Traditional EGWP Benefit Packages

  • Employer/union group health plan coverage has rarely followed the defined standard benefit design in Part D.

  • Most EGWP arrangements offer lower deductibles or provide coverage for certain claims incurred in the Part D coverage gap and/or have a different initial coverage limit.

Egwp supplemental prescription drug benefits
EGWP Supplemental Prescription Drug Benefits

  • Under the Affordable Care Act, manufacturer discounts are calculated after Part D supplemental benefits are applied but before any other health insurance (OHI) gets applied.

  • In 2013, EGWPs have the option to provide their supplemental benefits as either : a)Part D supplemental benefits under an Enhanced Alternative Part D plan (EA Plan) or b) Other health insurance (OHI) that is co-administered with their Part D Defined Standard benefit.

  • EGWPs structured as EA plans calculate and apply a 50% manufacturer discount directly to their enrollee copay or coinsurance portion of a coverage gap claim only.

  • Alternatively, EGWPs that are structured as Defined Standard plans with OHI wrapping around, calculate and apply the discount before the OHI wrap.

Egwp supplemental prescription drug benefits cont
EGWP Supplemental Prescription Drug Benefits (Cont.)

  • Beginning January 1, 2014, CMS will implement the change to the definition of Part D supplemental benefits in 42 CFR §423.100 (issued in CMS-4157-FC on April 12, 2012) to simplify this situation.

  • This means that all supplemental prescription drug benefits offered through EGWPs will be considered non-Medicare benefits, thus other health insurance (OHI).

  • Accordingly, if the non-Medicare supplemental benefits provide supplemental gap coverage for applicable drugs, these benefits are OHI that apply after the Coverage Gap Discount is calculated.

  • Consequently, the discount calculation will be based upon the Part D Defined Standard benefit for EGWPs.

Enrollment growth in egwps with prescription drug coverage cont
Enrollment Growth in EGWPs with Prescription Drug Coverage (Cont.)

  • EGWPs drove much of the growth in Part D enrollment from 2012 to 2013.

  • The elimination of the tax advantage related to the Retiree Drug Subsidy (RDS) program beginning in 2013 had many employers/unions shifting to the EGWP option.

Medicare part d employer group waiver plans egwps

Negative Invoice Amount Update

Joseph Hefter

Division of Payment Reconciliation/ Medicare Plan Payment Group


  • A negative amount on a manufacturer invoice represents money owed to the manufacturer from the Part D sponsor and can also be thought of as the gap discount amount a manufacturer has overpaid a Part D sponsor.

Introduction continued

  • Negative invoice amounts occur when a discount was invoiced in a prior quarter and the PDE was deleted or adjusted by the Part D sponsor in a future quarter and the decrease in financial fields are reflected in a future invoice.

  • If the particular manufacturer/sponsor combination does not have enough additional PDEs to offset the amount due, the result is a negative amount on the manufacturer invoice.

Two phased approach to resolving negative invoice amounts
Two Phased Approach to Resolving Negative Invoice Amounts

  • Phase I- “True-up” of all outstanding amounts due to manufacturers

  • Phase II- Enhance invoice to reduce the amount and frequency of overpayments to Part D sponsors

Phase i true up
Phase I – “True-up”

  • The first phase is designed to facilitate a “true-up” of all outstanding money owed from Part D sponsors back to manufacturers. The TPA will distribute a new report to both Part D sponsors and Manufacturers to notify each party of the total amount due.

The negative invoice repayment facilitation process
The Negative Invoice Repayment Facilitation Process

  • The TPA collects banking information from all Manufacturers to document the bank account where repayments should be directed

  • Manufacturer banking information is distributed securely to Part D Sponsors

  • TPA distributes “true-up” reports to Manufacturers/Part D Sponsors in their CGDP mailboxes

  • Part D sponsors will use this report to issue repayment to Manufacturers

  • There will be no payment confirmation required

Time schedule for phase i
Time Schedule for Phase I

  • “True-up” report distribution will occur twice:

    • The report distributed in Mid-October will include all negative amounts from Q1 2011 through Q2 2013.

    • The report distributed in Mid-April will include all negative amounts from Q3 2013 through Q4 2013.

File structure for phase i
File Structure for Phase I

  • We are currently finalizing the report layout and the final layout will be distributed in July.

  • Manufacturers should expect a similar file structure as the invoice reports with headers/trailers/detail records.

Data elements for phase i
Data Elements for Phase I

  • Starting and Ending Reporting period

  • Submitting Contract Number

  • Discounts Paid

  • Adjustments Due

  • Net Total

  • EFT Individual Identification Number

Phase ii invoice enhancements
Phase II – Invoice Enhancements

  • Beginning in Q1 2014, negative balances will be tracked and carried forward to the next invoice and offset by future positive CGDP payments to the extent possible.

  • The current invoice format will be revised to reflect this rolling balance and will indicate clearly the amount due.

  • Manufacturers should expect additional details (examples, revised invoice file layouts including additional fields) regarding this approach in early 2014

Phase ii invoice enhancements continued
Phase II – Invoice Enhancements (continued)

  • While we believe this approach will handle the majority of outstanding negative amounts, our research into current invoices has shown that it is likely that a “true-up” as described in Phase I will still be necessary.

  • The TPA will distribute reports like those produced under Phase I annually.

Timeline for phase ii
Timeline for Phase II

  • Manufacturers should expect additional details (examples, revised invoice file layouts including new fields) regarding this approach in early 2014.

Medicare part d employer group waiver plans egwps

Part B VS. Part D

Craig Miner

Division of Part D Policy/ Medicare Drug Benefit Group


  • CMS continues to receive disputes and appeals when a manufacturer believes that a drug should be covered under Part B

  • One cannot assume a drug is Part B because:

    • it is an injectable, or

    • it is on the Part B fee schedule, or

    • it is administered in the physician’s office

Part b vs part d determinations overview
Part B vs. Part D Determinations Overview

Distribution methods for physician administered medications are changing
Distribution Methods for Physician-Administered Medications are Changing

  • Traditionally, physicians have purchased medications, administered them to patients, and billed for reimbursement

  • Reimbursement practices have changed physician incentives for purchasing and maintaining medications

  • Now beneficiaries may:

    • Obtain medications from a network pharmacy and bring the medication to their physician’s office or hospital for administration (Brown Bag)

    • Use medications delivered directly to physician’s practice (White Bag)

Part b vs part d determinations
Part B vs. Part D Determinations are Changing

  • A drug dispensed by a pharmacy may be covered under Part B or Part D depending upon the form of the drug, how it is being used in treatment and the medical condition for which the drug is being prescribed

  • A vaccine may be covered under Part B or Part D

  • The Part D Sponsor is ultimately responsible for making the initial Part D coverage determination and review prescription details

    • use the pharmacist’s report of information included with the prescription

    • receive information from the beneficiary such as diagnosis (such as whether it is related to a Medicare covered transplant) or route of administration (such as delivered via Durable Medical Equipment)

    • impose prior authorization requirements to determine Part B vs. Part D coverage

Examples of drugs often covered under part b
Examples of Drugs Often are ChangingCovered Under Part B

Part d drugs
Part D Drugs are Changing

  • Available only by prescription

  • FDA approved and sold in the United States

  • Used for a medically-accepted indication

  • Includes:

    • Most prescription drugs and biological products

    • Insulin and medical supplies associated with the delivery of insulin

    • A vaccine licensed under section 351 of the Public Health Service Act and the administration of the vaccine

    • Prescription-only smoking cessation products

  • Excludes:

    • Over-the counter products, vitamins, weight loss/weight gain medications, agents to promote fertility, agents when used for cosmetic purposes, etc.

Dispute and appeal guidance
Dispute and Appeal Guidance are Changing

Explain why the unfavorable dispute determination was incorrect and that the discount payment likely is an error

Specify which Medicare Part B coverage category is the basis for the appeal

Confirm the Service Provider ID does not represent a pharmacy

If a drug that can be covered under Part B or Part D is dispensed through a pharmacy, the indication or patient setting supports being billed correctly under Part D

The manufacturer bears the burden of proof to clearly demonstrate the issue raised on appeal

References are Changing

  • Chapter 6, Section 20.2.2 Part D Sponsor Due Diligence in Prior Authorization of Part B Versus Part D Coverage Determination, Medicare Prescription Drug Benefit Manual

  • Chapter 6, Section 20.1 Excluded Categories, Medicare Prescription Drug Benefit Manual

  • Chapter 15, Section 50 Definition of a Drug or Biological, Medicare Benefit Policy Manual – Covered Medical and Other Health Services

  • Chapter 6, Section 10 Definition of a Part D Drug, Medicare Prescription Drug Benefit Manual

  • Chapter 6, Appendix C Part B Drugs and Part D Drugs Coverage Chart - Medicare Part B versus Part D Coverage Issues, Medicare Prescription Drug Benefit Manual

  • Memo: Medicare Coverage Gap Discount Program Dispute Resolution (Cheri Rice, 3/5/2012)

  • Memo: Not Part D Covered Drug--Part B Drug Ineligible for Discount (Cynthia Tudor, 5/31/11)

  • Memo: Additional Guidance concerning Closing the Coverage Gap in 2011 (Cynthia Tudor, 9/10/2010)

  • Reimbursement for Vaccines and Vaccine Administration Under Medicare Part D, CMS Medicare Learning Network Matters Article, Number SE0727, Revised 1/14/2013

  • Medicare part d employer group waiver plans egwps

    TPA Contact Information are Changing

    Shelly Winston

    Division of Part D Policy/ Medicare Drug Benefit Group

    Contacting the tpa
    Contacting the TPA are Changing

    • New TPA website -

    • Phone

      • Help Line: 1-877-534-2772 – Option 1

      • Hours: Monday thru Friday 8am to 7pm ET

    • General email inquiries regarding the invoicing and payment process should be sent to

    • Webinar slides will be posted to the TPA website

    • Suggestions for future webinar topics should be sent to

    • Questions related to dispute files, EFT information, invoice corrections– Website

      • - Dispute support documentation

    Resources are Changing

    • Medicare Drug Benefit Group

      • Questions related to the Manufacturers Agreement, changes of ownership, terminations, compliance / administrative-related issues, policy

      • Email address is

    • Discount Program Manufacturer’s Page


    • HPMS Website

      Updating CMS contact and labeler code changes

      • - Website

      • - Password Resets

      • - Non-password access assistance

    • Independent Review Entity (IRE) for Discount Program appeals.

      • - Website