The numbers of standalone Prescription Drug Plan (PDP) and Medicare Advantage plans with prescription drug benefits (MAPD) programs are increasing, meaning that organizational contracting with CMS is also on the rise. For these organizations—referred to by CMS as “Sponsors”—the application process is the first step in procuring a contract with CMS that includes the standards to which they will be held and to which they must answer in order to maintain a contract in good standing.

For organizations pursuing these strategic goals, deciding to either procure or expand a contract with CMS requires a great amount of planning and forethought in order to ensure the organization’s prescription drug plans are set up for optimal success and compliance. Comparable to other annual contractual obligations, the CMS’ application process requires new and expanding Part D programs will need to be organized and well-prepared to manage all of the fast-paced moving parts in order to successfully navigate toward go-live. Below are just some of the factors to be considered by any organization interested in pursuing an application with CMS.

Know What’s Expected Before the Application is Released by CMS

Who Must Complete an Application with CMS?

Entities wishing to offer a new Medicare Prescription Drug Plan (PDP), a Medicare-Advantage-Prescription Drug Plan (MA-PD, with and without EGWP), and those wishing to expand existing contracts with CMS for PDP, MA-PDP (including all Plan types) must complete an application with CMS.

How Much Time Should Our Organization Expect to Spend?

We estimate that an average new contract application will take up to 40 hours to complete and this includes submission of the actual application. Based on CMS 2022 application guidelines, it estimates that application collection requirements will take applicants an average of 7.2 hours. PillarRx recommends organizations to expect additional anticipated support hours that assume entities will require origination and/or extensive review of certain documentation and supportive consultation with both internal and external stakeholders. Applications for contract expansion will typically take less time, assuming re-contracting with first-tier entities is not required.

What Type of Support Will Our Organization Need?

A filing organization should plan to engage Part D Consulting and actuarial support. These organizations will also need to ensure it has adequately communicated with and has the full support of all internal stakeholders, from whom various application components will undoubtedly be required. Additionally, organizations should engage early on with all external stakeholders, including their PBM and TPA partners who will be supporting the contract with CMS.

Get Prepared

Know the Application Schedule

Applications for new and expanding contracts start more than a year before go-live on January 1st. The annual application schedule, typically released early-to-mid October, will provide timeline elements and dates to guide the application and contract project plans. With each application, a Notice of Intent to Apply (NOIA) will be required prior to the current year’s end and the completed application will typically be due in February of the following year. Once an application is submitted, there is an opportunity to cure deficiencies while also preparing for submission of all requisite contract components for a January 1st go-live.

The application milestones generally occur in the same timeline each year, so an organization does not need to have the application schedule for the next contracting year in order to have a good idea of when the milestones will be due to CMS. Key application milestones include Notice of Intent to Apply (NOIA) and application deadlines. The schedule also includes necessary elements for post-application and deadline estimates for critical contract components, such as annual formulary and bid submission deadlines.

Know Your Contracts: Good Paper Makes Good Partners

As mentioned, for any entity wishing to apply to CMS is it imperative to engage all stakeholders—both internal and external—in the endeavor prior to the release of the application guidance in October. For external partners, ensure that contracts have an existing language that supports the new plan or line of business. If the-contracts do not contain this contractual language, identify what needs to be negotiated and do that work prior to the application release. Starting these discussions early puts your organization in the most ideal negotiating position.

Successful Sponsors Need Good Consult

The application process with CMS is a good harbinger of the rigors of being a Sponsor—it is fast-paced, includes numerous details, and requires an extensive understanding of CMS’ expectations. The mere approval of the application should not be the goal of a Sponsor organization. Rather, the application should be the reflection of the Sponsor’s depth and aptitude to offer a contractually sound and compliant program that understands the foundation of Medicare’s requirements and the importance of operating in a manner that prioritizes beneficiary protections. These are key elements to being a successful Sponsor and they rely on the good consultation of trusted partners who have been steeped in Part D for decades, partners who understand not just the ‘what’ and ‘how’ of CMS’ expectations, but more importantly the contextual ‘why’ behind these requirements, so that your organization is able to go live with its vision clearly defined and supported by a sound and compliant program. We at PillarRx do not just support applications, we support Sponsors.

For more information on how we can help your organization’s Part D contracting goals, contact us at [email protected]