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March 23, 2006

APRIL 10 DEADLINE
FOR “ADVANCE” RETIREE DRUG SUBSIDY (RDS) PAYMENTS
FROM CMS

The Centers for Medicare & Medicaid Services (CMS) recently announced it will allow certain group health plans to request an advance on payments from the Medicare Part D Retiree Drug Subsidy (RDS) program. Only certain retiree health plans may request this advance – specifically, those plans with an approved RDS application that requested monthly subsidy payments on their application (not quarterly or annual payments). This advance would cover prescription drug expenses incurred from January 1, 2006, through March 31, 2006 (or for any month within that time period).

CMS refers to this advance as a “one-time payment” request. Requesting this one-time payment is an option. Plans that do not avail themselves of this option may request subsidy payments for January through March when the on-line payment process becomes operational (probably early July). It is unclear when the April one-time payment will be paid to plans. If plan sponsors wait until July to begin submitting claims and requesting payment from the RDS program, payments will likely be made sometime in the fall.

Because the RDS Center’s on-line payment process is not yet operational, retiree health plans requesting the one-time payment must send the required documentation to CMS by mail, by fax, or by sending a scanned image of the required documents via e-mail. All required documents must be received by CMS no later than April 10, 2006.

To request this one-time payment, retiree health plans must submit the following documents to CMS:

• Authorized Representative Verification Form. This one-page form must be completed and signed by a person who can verify the Authorized Representative's identity. The plan’s Account Manager is the most likely person to complete and sign this form.
• Electronic Funds Transfer (EFT) Confirmation. This one-page form must be completed and signed by the plan’s Account Manager or Authorized Representative.
• Cost Reporting Worksheet, with Intro Worksheet (available from CMS in Excel or in PDF format). The Cost Reporting Worksheet requires aggregate totals of Part D expenses, reported by month and by benefit option. The plan’s pharmacy benefit administrator(s) (in other words, the plan’s PBM(s), insurers(s), or TPA(s)) will need to provide the Account Manager with all the required information in the format required. The Intro Worksheet should be completed by the Account Manager because it requires a listing of each of the plan’s benefit options (by unique benefit option identification number) and shared with the plan’s pharmacy benefit administrator(s).

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