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Prescription Drug Event (PDE) Record Overview Medicare Coverage Gap Discount Program Public Meeting June 1, 2010.

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Presentation on theme: "Prescription Drug Event (PDE) Record Overview Medicare Coverage Gap Discount Program Public Meeting June 1, 2010."— Presentation transcript:

1 Prescription Drug Event (PDE) Record Overview Medicare Coverage Gap Discount Program Public Meeting June 1, 2010

2 Objectives Explain history and purpose Introduce data elements
Outline Part D payment reconciliation Review controls, edits and data quality measures

3 PDE History and Purpose
PDE introduced in 2006; no predecessor record format or system existed Designed and implemented to reconcile Part D payments When feasible, the PDE incorporated data from existing NCPDP billing transactions When necessary, CMS defined data elements needed for Part D payment reconciliation CMS-defined date and financial data elements use NCPDP format

4 PDE Data Elements Contract and Beneficiary Provider Event
Drug and Quantity Costs Payment Breakdowns Submission Format published at

5 PDE is Final Action Summary of Individual Claim
PDE summarizes adjudication of an individual claim Unlike other Medicare Programs, Part D Sponsor (not CMS) adjudicates claims following CMS guidance Part D sponsors must retain audit trails linking PDEs to source billing transactions Reporting is based on final action When sponsor adjusts or deletes previously saved record the “most recent record submitted” is designated as final action record Excludes final action deleted records

6 NCPDP Data Elements Include:
DATE OF SERVICE (DOS) PRESCRIPTION SERVICE REFERENCE NUMBER FILL NUMBER SERVICE PROVIDER ID and QUALIFIER (Pharmacy) PRODUCT SERVICE ID (NDC) INGREDIENT COST PAID DISPENSING FEE PAID TOTAL AMOUNT ATTRIBUTED TO SALES TAX   VACCINE ADMINISTRATION FEE

7 Part D Payment Reconciliation
Basic benefit is basis for Part D Payment Reconciliation Payment Methodologies: Low Income Cost-Sharing Subsidy (LICS) Reinsurance Subsidy Risk-Sharing Gap Discount (effective January 1, 2011)

8 Defined Standard Benefit - 2010
Beneficiary Liability Medicare Pays Reinsurance Direct Subsidy/ Beneficiary Premium

9 Information Required for Part D Payment Reconciliation – 2010
Part D enrollment Contract of Record, DOS Part D Covered Drug Drug Coverage Status Code = C Low Income Cost-Sharing Subsidy Status Low Income Cost-Sharing Subsidy (LICS) > 0 Cost in Catastrophic Benefit Phase (Reinsurance Cost) Catastrophic Coverage Code = C Gross Covered Drug Cost Above the Out-of-Pocket Threshold (GDCA) TrOOP status of OHI Payer, if any: Other TrOOP or Patient Liability Reduction due to Other Payer (PLRO) Basic benefit portion of Plan payment Covered Part D Cost (CPP) Non-Covered Plan Paid Amount (NPP)

10 Defined Standard Benefit 2020
Out Limit of Initial Coverage Threshold Catastrophic Total pocket Coverage Covered Drug Gap Discount Pays ~50% Spending 75% Plan Pays 80% Reinsurance Deductible Plan Pays ~25% 25% Coinsurance Total Beneficiary Out - Of - Pocket 15% Plan Pays 5% Coinsurance Beneficiary Liability Direct Subsidy/ Medicare Pays Reinsurance Beneficiary Premium Gap Discount

11 Information Required for Gap Discount
Applicable beneficiary Low Income Cost-Sharing Subsidy Status2010 Applicable drug Identified from Product Service ID (NDC) 2010 Applicable discount 50% of negotiated Price that falls in the Coverage Gap: Costs: Ingredient, Dispensing Fee, Sales Tax, Vaccine Admin Fee2010 Covered Part D Cost (CPP) 2010 Non-Covered Plan Paid Amount (NPP) 2010 Reported Gap Discount2011 Total Gross Covered Drug Cost Accumulator2011 Out-of-Pocket (TrOOP) Accumulator2011

12 Controls Certification Receipt and Control Editing Reporting
Part D Payment Reconciliation Attestations Government Oversight Program Integrity CMS internal auditors One Third (on-site) audit OIG Payment Error Validation Ad Hoc PDE validation studies

13 PDE Data Flow: Receipt and Control
Plan Prescription Drug Front-End System (PDFS) PDFS Response Report Drug Data Processing System (DDPS) DDPS Return File DDPS Transaction Error Summary Report Integrated Data Repository (IDR) Cumulative Beneficiary Summary Report P2P Reports Payment Reconciliation System (PRS)

14 Edit Categories Field level data validation
Duplicates and Business Order Logic (BOL) Eligibility LICS Provider Catastrophic Coverage Cost NDC Non-Covered Drugs Edits published at

15 Duplicate and BOL Editing
Record Type Adjustment Deletion Code Value Original blank Adjustment A88 Deletion D Key Fields: Date of Service (DOS) Prescription Service Reference Number Fill Number Service Provider ID Service Provider ID Qualifier Dispensing Status Code(Discontinued 2011)

16 Duplicate Editing Applies to Original Records only
777: Duplicate PDE record exists in DDPS data warehouse (originals only) 784: Duplicate PDE record, originally submitted by different contract 785: Duplicate PDE records exist on this file (CMS makes no assumption about sponsor intent) Duplicate logic disregards both beneficiary and contract

17 Business Order Logic Editing
Sponsors must submit records in order CMS makes no assumptions about sponsor intent 660: Adjustment/Deletion PDE does not match existing record 661: Cannot adjust a deleted record 662: Existing PDE has already been deleted Note: Original record may follow a Delete record

18 = = = Cost Balancing Edits Cost Fields: Payment Fields:
Ingredient Cost Dispensing Fee Sales Tax Vaccine Administration Fee Payment Fields: Beneficiary Liability Patient Pay Amount LICS Other TrOOP PLRO Plan Liability CPP NPP Reported Gap Discount = = Covered Drugs: GDCB: Gross Drug Cost Below the Out-of-Pocket Threshold GDCA: Gross Drug Cost Above the Out-of-Pocket Threshold =

19 Edits 690, 691 and 692 690: Sum of Cost Fields > Sum of Payment Fields +/- rounding error 692: Sum of Cost Fields < Sum of Payment Fields 691: Sum of GDCB and GDCA <> Sum of Ingredient Cost Dispensing Fee Sales Tax Vaccine Administration Fee 694: Sum of Ingredient Cost, Dispensing Fee, Sales Tax and Vaccine Administration Fee = zero

20 Service Provider ID Edits
Since May 2008, when NPI implementation completed, NPI routinely reported instead of NCPDP ID Service Provider ID field edited against NCPDP file (updated monthly) Ensures that provider is a pharmacy NCPDP file contains NCPDP and associated NPI identifiers Vaccine PDEs: CMS accepts physician NPI in lieu of entry on NCPDP file, provided that NPI, is reported in valid format

21 NDC Edits 735: NDC code does not match a valid code on the NDC database (updated weekly) 738: NDC identifies a Part D non-covered drug, i.e., NDCs not listed with the FDA 740: NDC is DESI drug

22 Two Phase Data Quality Oversight
Phase One: Online editing; CMS edits individual PDEs to the fullest extent possible Phase Two: Ad Hoc studies to evaluate data quality Studies based on saved PDEs Data screens applied to individual records Data screens evaluate consistency of individual record in context of all records for single beneficiary Questions posted on PDE validation web site; sponsors evaluate and respond Discontinue screens with high false positive rates

23 Reporting Lag (Hypothetical Data)
Percentage Month of Service Month PDE Reported

24 Manufacturer’s Perspective
Differentiate data sources The PDE is a final action record which summarizes multiple transactions for a single claim Discount is not the same as rebate Recognize that PDE data is subject to rigorous scrutiny because it must support Part D Payment Reconciliation Reserve predictions/conclusions; year one data lags may not be representative Remember that Part D is a capitated benefit; duplicates and increased utilization reduce sponsor revenue

25 Resources CMS Website publishes PDE Instructions:
01_PDEGuidance.asp#TopOfPage Customer Service website publishes format, edits and training information: Gap Discount guidance published via HPMS


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