July 7 -- The Centers for Medicare & Medicaid Services, Health and Human Services (HHS) invites comment to OMB by August 10, 2023 regarding the proposed Medicare Part D Manufacturer Discount Program Agreement. (Comments due 30 days after submission to OMB on July 11.)
On August 16, 2022, Congress enacted the Inflation Reduction Act of 2022, Public L. 117-169 (IRA). Section 11201 of the IRA eliminates the coverage gap phase of the Part D benefit. It also sunsets the coverage gap discount program (CGDP) after December 31, 2024, and amends the Social Security Act (the Act) to add section 1860D-14C, requiring the Secretary to establish a new Medicare Part D manufacturer discount program (Discount Program) beginning January 1, 2025. Under the Discount Program, participating manufacturers are required to provide discounts on their “applicable drugs” (brand drugs, biologics, and biosimilars) both in the initial coverage phase and in the catastrophic coverage phase of the Part D benefit.
Pursuant to section 11201(g) of the IRA, CMS will implement the Discount Program through program instruction. On May 12, 2023, CMS issued Discount Program draft guidance through a Health Plan Management System (HPMS) memorandum, giving interested parties an opportunity to review and comment. Comments on the draft guidance were due to CMS on June 12, 2023, and CMS expects to issue final guidance later in 2023. While there are notable differences, the IRA includes many requirements for the Discount Program that largely mirror requirements for the existing CGDP; therefore, CMS intends to implement the Discount Program in a similar manner. Section 1860D-14C(a) of the Act requires participating manufacturers to enter into agreements with CMS no later than March 1, 2024 in order to participate in the Discount Program in 2025. Agreements will be valid for not less than one year and automatically renew unless terminated by CMS or the manufacturer, as described at section 1860D-14C(b)(4).
Section 1860D-14C(d)(1) of the Act requires CMS to implement and administer the Discount Program, which includes the determination of discounted amounts, procedures to ensure that discounts are applied appropriately, discount payments (reimbursements) are timely made, and to provide a reasonable dispute resolution mechanism to resolve disputes between manufacturers, Part D plan sponsors, and CMS. However, section 1860D-14C(d)(2) of the Act prohibits CMS from directly receiving or distributing any funds of a manufacturer under the Discount Program. As such, CMS intends to continue using a third party administrator (TPA) to facilitate program operations in the same manner as has been done for the CGDP. The TPA, a CMS contractor, is an accredited Automated Clearing House (ACH) vendor that uses data from other CMS sources to invoice manufacturers and plan sponsors, processes ACH transactions, and reports ACH activity to CMS.
Discounts are phased in for “specified manufacturers,” defined at section 1860D-14C(g)(4)(B) of the Act, and “specified small manufacturers,” defined at section 1860D-14C(g)(4)(C) of the Act. In order to implement the Discount Program, CMS will identify which participating manufacturers qualify for the phased-in discounts using Medicare claims data and ownership information submitted by manufacturers as part of this information collection, pursuant to the requirements at section 1860D-14C(g)(4) of the Act. When submitting comments on this collection, CMS requests that interested parties give particular attention to the new data fields included in Appendix A that are being added for this purpose.
As discussed in section 50.1 of the draft guidance, all manufacturers that enter into a Discount Program agreement in time to participate in any year of the phase-in will be considered for eligibility, and do not need to submit a separate application. For the first year of the Discount Program, CMS intends to provide manufacturers that submit and attest to the required ownership information by a certain date (to be announced later this year) with information regarding their eligibility for the phase-ins prior to the statutory deadline of March 1, 2024 to enter into a Discount Program agreement for 2025.
In addition to the information included in this collection, administration of the Discount Program will require plan sponsors to provide data to CMS for discounts the sponsor or its PBM advanced at the point-of-sale for applicable drugs. This data is submitted as part of the Prescription Drug Event (PDE) file for each relevant paid claim, and is accounted for in a separate information collection, CMS-10174 (OMB control number 0938-0982), currently approved through February 28, 2025.
Part D Manufacturer Discount Program Draft Guidance:
https://www.cms.gov/files/document/part-d-manufacturer-discount-program-draft-guidance-may-2023.pdf
CMS submission to OMB:
https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202307-0938-003 Click IC List for information collection instrument, View Supporting Statement for technical documentation. Submit comments through this webpage.
FRN:
https://www.federalregister.gov/d/2023-14306 #3
For AEA members wishing to submit comments, "A Primer on How to Respond to Calls for Comment on Federal Data Collections" is available at
https://www.aeaweb.org/content/file?id=5806