The Medicare Part D Coverage Gap Discount Program (CGDP) allows eligible Part D participants to receive manufacturer discounts on applicable covered Part D brand name drugs, while in the Coverage Gap. As soon as the beneficiary enters the Coverage Gap the discount is extended to them at the point-of-service by the Part D sponsor. In coordination with Centers for Medicare & Medicaid Services (CMS), the Part D sponsor then bills the manufacturer each quarter for the applicable discounts. Palmetto GBA is the third-party administrator responsible for the billing and collection of the coverage gap discount payments.
Manufacturers have the right to dispute coverage gap discount invoices through a pay and chase dispute process defined by CMS. Understanding the CGDP dispute process can help these manufacturers determine when it’s worthwhile to submit a dispute and what to expect if they choose to dispute a coverage gap discount payment.
Identifying the Basis for Disputes
According to the CMS, all CGDP disputes must be based solely on policies associated with Medicare Part D. A dispute submission file based on a CMS predefined format and layout along with detailed explanation is required to outline the errors or discrepancies found by manufacturers during the course of their coverage gap data validation process. While duplicate items are among the most common errors identified through the script-level claims data validation process in the pharmaceutical industry and are usually the easiest to resolve, these types of disputes are not as evident under the CGDP. However, there are other more valid reasons for disputes under CGDP; CMS has defined 15 dispute reason codes acceptable for dispute a few of the most common aside from duplicates are:
- Excessive Quantity (D04)
These disputes arise from excessive quantities submitted on a prescription line that are deemed to not be clinically appropriate or in excess based on the product labeling and prescribing guide and based on the manufacturers defined thresholds ; if quantities of a drug exceed three times the maximum daily dose recommended by the FDA, CMS may uphold this dispute on the part of manufacturers Excessive quantities can be caused by a prescribing error or a dispensing or entry error at the pharmacy.
- High Price of the Drug (D06)
These disputes arise when the unit prices for the applicable drugs NDC is called into question. However, this difficult to prove as the coverage gap discount is based on the Medicare Part D negotiated prices, which are not determined by a statutory formula and may differ by plan, as each sponsor enters into private negotiations to determine the price. CMS may uphold the dispute if the unit price of the disputed PDEs does not fall into a reasonable range based on all other relative PDEs accepted for the same NDC.
Marketing Category is Not NDA or BLA (D09) and Maximum Gap Discount Disputes (D99-Other) are also common disputes submitted. Manufacturers can submit disputes for any of the remaining CGDP dispute reason codes.
Preparing a Dispute Submission File
Once issues have been identified with CGDP discounted invoice, drug manufacturers can complete a Dispute Submission File that contains only the records that are disputed by the company. This file must be accompanied by back-up information regarding the disputed items to support the manufacturer’s case. Dispute Submission Files are sent to a third-party administrator (TPA) electronically and can be corrected if format or syntax issues cause their automatic rejection. Validation checks typically take place on the same day as the submission; however, the deadlines for submitting disputes are not adjusted if a syntax rejection occurs. For this reason, it is usually beneficial to transmit Dispute Submission Files well before the deadline for these submissions arrives.
Following Up with the TPA
Once the Dispute Submission File has been accepted, the TPA can take up to 60 days to uphold or deny the dispute. The TPA will provide a code and explanation in each case. If the dispute is upheld, the plan sponsor must provide corrected and updated prescription drug event data to CMS to ensure proper payment to manufacturers who supply drugs to Medicare Part D through the CGDP program. Denials of disputes can be appealed within 30 days of the denial or after 60 days have elapsed from the filing date for the dispute if it has not been resolved within that time.