Born of the Affordable Care Act of 2010, the Coverage Gap Discount Program (Discount Program) was established to close the coverage gap, or ‘donut hole’, that exists between the initial coverage and catastrophic phases of the standard Medicare Part D benefit design. Effective January 1, 2011, the Discount Program makes drug manufacturer discounts available to eligible Medicare beneficiaries and Sponsors for applicable, covered Part D drug costs incurred while in the coverage gap. Drug manufacturers must elect to agree to the discount on all applicable drugs and only those applicable drugs covered under that agreement may be covered under Part D. Participation in and removal from the Discount Program occurs continuously throughout the year, and these labeler codes are tracked and communicated by CMS on a monthly basis with the expectation that Sponsors are using up-to-date information when determining eligible products.

In addition to the importance of updating the labeler codes for proper claims adjudication, the Discount Program’s quarterly invoice and remittance process are equally important. Once a manual operation, consisting of emailed spreadsheets for tracking payments is established, (this process was automated by CMS in 2017 and brought under the management of the TPA to house and facilitate the CGDP Portal where all invoicing and payment is tracked) it is critically important that this activity is also validated by Sponsors before receiving and remitting quarterly Discount Program payments. Whether a Sponsor is receiving prospective Discount Program payments from CMS and wants to use the quarterly process to determine its overall financial revenue or liability for the year or a Sponsor wants assurance that all eligible claims have been captured for Discount Program payments, validating the quarterly activity is pivotal to exercising best practice-level oversight of the program’s PDE management.

To learn more about how PillarRx’s Coverage Gap Discount Program Reconciliation process can help your organization in best-in-class oversight, contact us here.