Prescription Drug Event (PDE) Record Overview

Medicare Coverage Gap Discount Program

Public Meeting June 1, 2010

Objectives

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

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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

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PDE Data Elements

• Contract and Beneficiary• Provider • Event • Drug and Quantity • Costs • Payment Breakdowns• Submission Format published at

http://www.csscoperations.com/new/pdic/pde/ddps.html

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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

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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

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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)

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Defined Standard Benefit - 2010

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Beneficiary Liability Medicare Pays ReinsuranceDirect Subsidy/Beneficiary Premium

Information Required for Part D Payment Reconciliation – 2010

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Part D enrollment Contract of Record, DOS

Part D Covered Drug Drug Coverage Status Code = CLow 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)

Defined Standard Benefit 2020

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Total Covered

Drug Spending

Beneficiary Liability

Deductible

15% Plan Pays

CatastrophicCoverage

5% Coinsurance

Medicare Pays Reinsurance

25% Coinsurance

Out of pocket

Threshold

Direct Subsidy/Beneficiary Premium

Total BeneficiaryOut-Of- Pocket

80% Reinsurance75% Plan Pays

Initial Coverage

Limit

Plan Pays ~25%

Gap Discount Pays ~50%

Gap Discount

Information Required forGap Discount

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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

Controls

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•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

PDE Data Flow: Receipt and Control

Plan

PDFS Response Report

Drug Data Processing System (DDPS)

DDPS Return FileDDPS Transaction Error Summary Report

Integrated Data Repository (IDR)

Cumulative Beneficiary Summary Report

P2P Reports

Prescription Drug Front-End System (PDFS)

Payment Reconciliation System (PRS)

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Edit Categories

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•Field level data validation •Duplicates and Business Order Logic (BOL)•Eligibility •LICS•Provider•Catastrophic Coverage •Cost •NDC•Non-Covered Drugs

Edits published at http://www.csscoperations.com

Duplicate and BOL Editing

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Record Type Adjustment Deletion Code Value

Original blank

Adjustment A88

Deletion D

Duplicate Editing

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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

Business Order Logic Editing

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•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 record662: Existing PDE has already been deleted

Note: Original record may follow a Delete record

Cost Balancing Edits

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Cost Fields:Ingredient CostDispensing FeeSales TaxVaccine Administration Fee

Payment Fields:Beneficiary LiabilityPatient Pay AmountLICSOther TrOOPLICSPLRO

Plan LiabilityCPPNPP

Reported Gap Discount

Covered Drugs:GDCB: Gross Drug Cost Below the Out-of-Pocket ThresholdGDCA: Gross Drug Cost Above the Out-of-Pocket Threshold

=

=

Edits 690, 691 and 692

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690: Sum of Cost Fields > Sum of Payment Fields +/- rounding error

692: Sum of Cost Fields < Sum of Payment Fields +/- rounding error

691: Sum of GDCB and GDCA <> Sum of Ingredient Cost

Dispensing FeeSales TaxVaccine Administration Fee

694: Sum of Ingredient Cost, Dispensing Fee, Sales Tax and Vaccine Administration Fee = zero

Service Provider ID Edits

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•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

NDC Edits

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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

Two Phase Data Quality Oversight

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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

Reporting Lag (Hypothetical Data)

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Month of Service Month PDE Reported

Manufacturer’s Perspective

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•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

Resources

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CMS Website publishes PDE Instructions:http://www.cms.gov/DrugCoverageClaimsData/01_PDEGuidance.asp#TopOfPage

Customer Service website publishes format, edits and training information: http://csscoperations.com/

Gap Discount guidance published via HPMS