Contract with Approved Entity Pursuant to section 1860D-31 of the Social Security Act for the Operation of a Medicare-Approved Prescription Drug Discount Card Between Centers for Medicare & Medicaid Services (hereinafter referred to as CMS) And WellCare of Louisiana, Inc. (hereinafter referred to as the Card Sponsor)

Contract with Approved Entity Pursuant to section 1860D-31 of the Social Security Act for the
Operation of a Medicare-Approved Prescription Drug Discount Card

Between

Centers for Medicare & Medicaid Services (hereinafter referred to as “CMS”)

And

WellCare of Louisiana, Inc.
(hereinafter referred to as the “Card Sponsor”)

CMS and the Card Sponsor, an entity that has been determined eligible to operate a Medicare-approved prescription drug discount card by the Administrator of CMS under 42 CFR §403.806, agree to the following for the purposes of section 1860D-31 of the Social Security Act (hereinafter referred to as “the Act.”)

Article I

Term of Contract

The term of this contract shall be from the date of the Card Sponsor’s authorized representative’s signature through December 31, 2005, with the Card Sponsor required to continue to make available to beneficiaries still enrolled on December 31, 2005 drug discounts and any remaining transitional assistance until the earlier of each enrollee’s effective date of enrollment in a Part D drug plan or the last day of the initial open enrollment period for Part D. The Card Sponsor shall not accept new enrollments after December 31, 2005. There shall be no renewal of this contract under section 1860D-31 of the Act.

Article II

Medicare-Approved Prescription Drug Discount Card

Article III

Functions to be Performed by the Card Sponsor

A. DRUG CARD OFFERING

B. SERVICE AREA AND PHARMACY ACCESS

C. ELIGIBILITY AND ENROLLMENT

D. CARD SPONSOR PAYMENT AND TRACKING OF TRANSITIONAL ASSISTANCE

The Card Sponsor agrees to administer the payment of transitional assistance to eligible beneficiaries consistent with 42 CFR §403.808 and 42 CFR §403.806(e) and Sections 3.5.4 and 3.5.5 of the solicitation.

E. CMS REIMBURSEMENT OF CARD SPONSORS FOR TRANSITIONAL ASSISTANCE

The Card Sponsor agrees to comply with the qualifications stated in Sections 3.5.4 and 3.5.5 of the solicitation to receive reimbursement from CMS for transitional assistance used by enrollees in the Card Sponsor’s drug card(s). CMS agrees to pay any enrollment fee for transitional assistance enrollees to the Card Sponsor in accordance with 42 CFR § 403.808(c). The Card Sponsor recognizes that transitional assistance and enrollment fees paid by CMS are paid with Federal funds.

F. OTHER DRUG-RELATED ITEMS AND SERVICES INSIDE THE SCOPE OF THE APPROVAL

Consistent with 42 CFR § 403.806(h) and Section 3.4 of the solicitation, the Card Sponsor agrees that it may provide under the approval, at its discretion, non-required additional services related to a covered drug card drug (e.g., durable medical equipment related to a covered drug) or discounts on over-the-counter drugs for no extra charge to enrollees. These services would be in addition to the basic program requirements, such as 1) offering negotiated prices on covered discount card drugs, 2) ensuring convenient pharmacy access, 3) reducing the likelihood of medical errors and adverse drug interactions, 4) providing customer service and information and outreach materials, 5) providing a grievance mechanism, and 6) administering transitional assistance. The Card Sponsor agrees that its drug card enrollees shall not be charged an additional fee for either required services or additional services provided under the approval.

G. INFORMATION AND OUTREACH ACTIVITIES

H. CUSTOMER SERVICE

The Card Sponsor agrees to operate a call center to serve its drug card enrollees, potential applicants, and pharmacists that meets at least qualifications stated in 42 CFR §403.806(g)(6) and Section 3.5.6 of the solicitation.

I. REDUCTION OF MEDICAL ERRORS

Consistent with 42 CFR § 403.806(g)(7) and Section 3.5.7 of the solicitation, the Card Sponsor agrees to operate a system, supported by scientific and clinical literature, to reduce the likelihood of medication errors and adverse drug interactions and to improve medication use.

J. GRIEVANCES/CUSTOMER COMPLAINTS

The Card Sponsor agrees to establish and maintain a grievance process to track and address in a timely manner enrollees’ complaints about any aspect of the Card Sponsor’s operations consistent with the provisions of 42 CFR §403.806(j) and the qualifications stated in Section 3.5.8 of the solicitation.

K. TIMEFRAMES

The Card Sponsor agrees that it may not begin any information and outreach or enrollment activities related to its drug card(s) until:
1. CMS approves of the Card Sponsor’s information and outreach materials;

Article IV

Reporting and Record Retention

A. CARD SPONSOR REPORTING

The Card Sponsor agrees to report to CMS data, in accordance with Section 3.6 of and Attachment 6 to the solicitation, consistent with the provisions of 42 CFR §403.806(i)(1), (2), (3), and (4). In addition, the Card Sponsor agrees to submit to CMS at the request of CMS a description of the services provided under the Card Sponsor’s drug card(s) in accordance with 42 CFR §403.806(i)(5).

B. RECORD RETENTION

The Card Sponsor agrees to retain records that it creates, collects, or maintains as part of its operations of a drug card(s) for at least six years following the termination of this contract in accordance with 42 CFR §403.813(b). For the period during which the Card Sponsor retains these records, the Card Sponsor shall continue to apply security and privacy protections as required under 42 CFR §403.812(b) and 42 CFR §403.812(c)(1). At the end of this period, the Card Sponsor will certify to CMS in writing that such records have been destroyed or, if it is infeasible to destroy such records, protections are extended to such information to the extent required by law.

Article V

HIPAA Transactions/Privacy/Security

1. Obligations and Activities of the Card Sponsor

2. Permitted Uses and Disclosures by the Card Sponsor –

5. Effect of Termination

Article VI

Business Integrity and Financial Stability

The Card Sponsor agrees to maintain a satisfactory record of financial stability and business integrity during the term of this contract in accordance with 42 CFR §403.806(b)(2), and to require the same of any subcontractor on whom the Card Sponsor relied during the application process to satisfy the 3 years experience requirement in 42 CFR §403.806(a)(2) and the covered lives requirement in 42 CFR §403.806(a)(3) or to develop the pharmacy network; negotiate with manufacturers of pharmacies for rebates, discounts, or other price concessions; handle eligibility for or enrollment in the Card Sponsor’s drug card(s) and/or transitional assistance; and administering transitional assistance.

Article VII

Compliance With Other Laws and Regulations

In accordance with 42 CFR §403.806(c), the Card Sponsor agrees to comply with all applicable Federal and State laws, including the Federal anti-kickback statute (section 1128B(b) of the Act) and the False Claims Act (31 U.S.C. §§3729-3733)

Article VIII

Operation of a Drug Card That Includes Long Term Care Facilities

In the event that the Card Sponsor has applied for, and CMS has granted, special approval for the operation of a drug card(s) that includes pharmacies serving long term care facilities, in addition to the requirements stated elsewhere in this contract, the Card Sponsor agrees to comply with the requirements of 42 CFR §403.816(b) and (c) and the qualifications stated in Section 4.1 of the solicitation.

Article IX

Operation of a Drug Card That Includes I/T/U Pharmacies

In the event that the Card Sponsor has applied for, and CMS has granted, special approval for the operation of a drug card(s) that includes Indian Health Service, Indian Tribe and Tribal Organization, and Urban Indian Organization (I/T/U) pharmacies, in addition to the requirements stated elsewhere in this contract, the Card Sponsor agrees to comply with the requirements of 42 CFR §403.816(d) and (e) and the qualifications stated in Section 4.2 of the solicitation.

Article X

Operation of Drug Card That Serves Medicare Beneficiaries Residing in the United States Territories

In the event that the Card Sponsor has applied for, and CMS has granted, special approval for the operation of a drug card(s) that includes in its service area all of the territories of the United States, in addition to the requirements stated elsewhere in this contract, the Card Sponsor agrees to comply with the requirements of 42 CFR §403.817 and the qualifications stated in Section 4.3 of the solicitation.

Article XI

Modification, Termination, Penalties, and Sanctions

A. MODIFICATION OR TERMINATION BY MUTUAL CONSENT

B. TERMINATION BY CMS

C. TERMINATION BY CARD SPONSOR

D. PENALTIES AND SANCTIONS

Consistent with 42 CFR §403.820(a) and (b), the Card Sponsor may be subject to penalties and sanctions.

Article XII

Miscellaneous

3. The Card Sponsor discontinues any product or service inside the scope of its approval;
4. The Card Sponsor wishes to offer a new product or service under its approval;

E. CONNECTIVITY SERVICES:

FOR THE CARD SPONSOR

FOR THE CENTERS FOR MEDICARE & MEDICAID SERVICES

Acting Director
Medicare Plan Accountability Group
Center for Beneficiary Choices

1

ATTACHMENT A

Medicare-Approved Prescription Drug Discount Card and Transitional Assistance Program

Solicitation for Applications for Medicare Managed Care Organizations
December 16, 2003

Table of Contents

1.0 INTRODUCTION
1.1 Background

3.0 SUMMARY OF QUALIFICATIONS

3.2 Formulary and Discounts to Beneficiaries

3.5.4 CMS Reimbursement of Transitional Assistance

3.5.5 Card Sponsor Payment and Tracking of Transitional Assistance

ATTACHMENTS

1.0 INTRODUCTION

The Centers for Medicare and Medicaid Services is seeking applications from Medicare managed care organizations offering an exclusive card program (as described in the Medicare Prescription Drug Discount Card and Transitional Assistance Program Interim Final Rule [Federal Register, December 15, 2003]) who are interested in entering into a Medicare approval contract. Medicare managed care organizations eligible to offer an exclusive card program are Part C organizations offering a plan described at section 1851(a)(2)(A) of the Social Security Act and reasonable cost reimbursement plans under Section 1876(h) of the Act. Applications are to be submitted according to a process described under “Applicant Instructions” in Section 2.0.

1.1 Background

Statutory Authority

The Medicare Prescription Drug Discount Card and Transitional Assistance Program (hereafter referred to as the “Medicare Drug Discount Card Program”) was established by section 101 subpart 4 of Pub.L. 108-173, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and is codified in section 1860D-31 of the Social Security Act (the Act).

September 2002 Program Superceded

As stated in the interim final rule for this program, the final rule published September 4, 2002 (67 FR 56618) and the solicitation published in conjunction with that final rule have already been withdrawn. This solicitation is in no way connected to the September 4, 2002 final rule.

Overview

Entities already under contract with CMS to operate a Part C coordinated care plan described at section 1851(a)(2)(A) of the Act or a reasonable cost reimbursement plan under section 1876(h) of the Act (known as “Medicare managed care plans,” with the entities offering such plans known as “Medicare managed care organizations”) may seek to operate as an approved discount card exclusively for members of one or more their Medicare managed care plans (known as “exclusive card programs,” with the organizations offering these exclusive card programs known as “exclusive card sponsors.”). Medicare managed care organizations already have an established relationship with CMS and an existing set of Medicare beneficiaries enrolled in their Medicare managed care plans. In addition, their Medicare managed care plans may include an outpatient drug benefit offering with pharmacy networks. Therefore, it is appropriate that we alter for exclusive card sponsors certain discount drug card sponsor qualifications to ensure that members of Medicare managed care plans offered by organizations sponsoring exclusive card programs can benefit from integration of the benefits offered under the exclusive card program and their Medicare managed care plan. In addition, altering card sponsor requirements that are duplicative of or conflict with requirements under the Medicare managed care program will promote greater efficiency under both programs. Medicare managed care organizations seeking an approval of a drug card whose enrollment is limited to members of one or more of its Medicare managed care plans are required to complete this abbreviated application for approval rather than the standard Medicare Discount Card Application used by all other entities seeking an approval. Medicare managed card organizations seeking an approval for a drug card program whose enrollment will not be limited to members of one or more of its managed care plans should respond to the Solicitation for Application for Non-Medicare Managed Care Organizations.

Congress has waived or modified standard drug program requirements in several areas for exclusive card sponsors. In addition, CMS has waived or modified additional standard drug program requirements for exclusive card sponsors under its authority under Section 1860D-31(h)(9)(B)(iii) of the Act, which authorizes waiver or modification of approved sponsor requirements if those requirements are duplicative of or conflict with requirements applicable to Medicare managed care organizations under Part C or Section 1876 of the Medicare statute, or if waiver of the requirements would improve coordination of the benefits under the Medicare Prescription Drug Discount Card Program and Medicare managed care plans. Specifically, the following requirements are waived or modified for exclusive card sponsors: (1) the requirements in 42 CFR 403.806(f)(1) and (2) that approved sponsors offer their approved card programs to all discount card eligible individuals residing in their service area and that their service area encompass all portions of a State; (2) the pharmacy access standard under Section 1860D-31(e)(1)(B) of the Act; (3) the covered lives requirement in 42 CFR 403.806(a)(3); and (4) the requirement in 42 CFR 403.808(d)(1) that transitional assistance be applied only toward costs incurred for covered discount card drugs obtained through the Medicare drug discount card program.

As discussed in further detail, we will consider waiving or modifying the following requirements upon request:

Section 3.0 further discusses these waivers and modifications. If the Applicant wishes for CMS to waive/modify any of these requirements, it should request the waiver or modification, and provide an explanation in support of its request, in its application. Applicants may also request that CMS waive or modify other requirements for approval. To do so, the Applicant must demonstrate that the requirements at issue are duplicative of, or conflict with, requirements applicable to Medicare managed care organizations, or that they interfere with the coordination of benefits offered under their drug card with benefits provided under the Medicare managed care program. NOTE: Our regulations provide that the provisions in 42 CFR 403.812 and 403.813 may not be waived.

In addition, given the unique characteristics of and requirements under the Medicare managed care program, the approach we are taking in the standard Medicare Discount Card Application is not always warranted for Medicare managed care organizations that wish to operate an exclusive card program. In order to account for these differences, we have also modified some of the procedures for demonstrating compliance with certain drug card sponsor requirements. For example, although exclusive card sponsors must meet the business stability and financial integrity requirement in 42 CFR 403.806(b), we permit exclusive card sponsors to demonstrate their compliance with this requirement through continued compliance with 42 CFR 422.400 (in the case of Part C organizations) or 42 CFR 417.120 and 417.122 (in the case of Medicare cost plans). In addition, we modify the procedural requirements concerning the call center and the grievance/customer complaints processes.

1.3 Objectives

The Drug Card Program is intended as a transitional program to provide immediate assistance with prescription drug costs to Medicare beneficiaries during CY 2004 and CY 2005 and through a transitional period in 2006 while preparations are made for the implementation of a full Medicare drug benefit in 2006. Medicare generally does not cover the cost of outpatient drugs. The Medicare Drug Discount Card Program is designed to provide Medicare beneficiaries – and particularly those without drug coverage – access to discounts on outpatient prescription drugs through enrollment in card programs offered by sponsors approved by Medicare. Certain enrollees may also qualify, based on low income and lack of other drug coverage, for up to $600 of annual transitional assistance that they may apply directly to the cost of their drugs obtained using their discount drug cards.

The objectives of the Drug Card Program are to:

1.4 Program Overview

1.4.1 Summary of Card Program Responsibilities

Key aspects of each Medicare managed care approved discount card shall include the ability to:

1.4.2 Summary of CMS Responsibilities

Approval Process

CMS has determined the qualifications entities must meet to receive Medicare approval for their prescription drug discount cards. CMS will review the applications for approval submitted in response to this solicitation. CMS will determine which entities qualify for approval and enter into agreements with appropriate card sponsors.

Drug Card Program Oversight

CMS plans to develop a Medicare Drug Discount Card program monitoring system to ensure compliance with program requirements. We plan to focus on several operational areas critical to beneficiary satisfaction with their drug card and to protecting the financial integrity of the transitional assistance portion of the program. Specifically, we plan to focus on enrollment and disenrollment, information and outreach, access to pharmacies and discounts, customer service, confidentiality of enrollee information, and proper payment of transitional assistance. (NOTE: CMS will monitor approved drug card sponsors to ensure that they maintain the confidentiality of enrollee information required for approval. In addition, approved drug card sponsors, as covered entities under the Privacy Rule, are subject to investigation and penalties for findings of Privacy Rule violations as determined by the Department of Health and Human Services Office for Civil Rights and the Department of Justice.)

Our monitoring efforts will be based on an analysis of data we collect from drug card sponsors, CMS contractors, external government entities and our own systems. Such data will include pricing information, card sponsor grievance logs, marketing review information, customer service performance data, and customer complaints. For a list of the card sponsor reporting requirements, please see Section 3.6.

CMS will develop and operate a complaints tracking system to monitor and manage complaints brought to our attention that are not satisfactorily resolved through card sponsors’ grievance process. We plan to conduct mystery shopping and beneficiary satisfaction surveys. Finally, CMS plans to engage a program safeguard contractor to conduct random audits of card sponsors’ transitional assistance enrollment and payment records.

Any information gathered will be analyzed to detect possible trends that indicate less than satisfactory performance, significant departures from the marketed card program offering, or fraud or other violations of State and Federal laws.

CMS will make determinations about the need for corrective action, intermediate sanctions, civil monetary penalties, or contract termination, consistent with the requirements of 42 C.F.R. §403.820. The Office of the Inspector General also has the authority to levy civil monetary penalties in certain situations, consistent with 42 CFR 403.820. Finally, we will also make all necessary referrals to the Department of Health and Human Services Office of the Inspector General, or to Federal and State authorities where violations of laws under the jurisdictions of these agencies is in question.

Education and Outreach

CMS is committed to educating Medicare beneficiaries about the Drug Discount Card Program, at the time the approvals are announced and as part of ongoing education efforts thereafter. CMS anticipates that there will be national media attention when the Medicare-approved discount card programs are announced in the Spring of 2004. We will make available general program information and a subset of comparison information for each non-Medicare managed care drug card program 30 days before the initial enrollment date. The general information will address the availability of the Medicare drug discount card program and general program features (e.g., limitation of enrollment to only one drug card at a time, initial enrollment date, the use of formularies containing the drugs on which discounts are available). CMS will also disseminate information about the availability of transitional assistance and the eligibility requirements for such assistance. We will disseminate specific comparison information about non-Medicare managed care drug card programs to promote informed consumer choice, including enrollment fee, customer service hours, contact information, drug card web site, and special notices (e.g., if a sponsor has a special approval for administering their program to American Indians/Alaska Natives, residents of long term care facilities, and/or residents of the territories). We will provide only limited information about Medicare managed care drug card programs – specifically, whether a Medicare managed care plan offers a Medicare-approved discount card program – and refer beneficiaries to Medicare managed care plans for further information about Medicare managed care drug card programs. This information will be made available through the Medicare web site (www.medicare.gov) and through the toll-free information line (1-800-MEDICARE).

CMS plans to educate beneficiary and consumer groups, health care providers, States, and other interested groups about the Medicare drug discount card program. CMS may also engage in other activities that publicize or otherwise educate beneficiaries about the program.

CMS will provide, through the Prescription Drug and Other Assistance Program section of www.medicare.gov, a price comparison web site that will include negotiated prices in actual dollars, which will include dispensing fee information, for the purpose of comparing across non-Medicare managed care approved card programs. If, as permitted below, a Medicare managed care contractor requests a waiver of reporting price formulary drug pricing data through a price comparison web site and we grant such a request, price information will not be provided for exclusive Medicare managed care approved card program(s).

Information and Outreach Guidelines and Review

CMS has developed a contractor to provide technical assistance in the development of the information and outreach guidelines. The guidelines are posted on the CMS website as a separate document from this solicitation. Included in the information and outreach guidelines are standards for the use of a Medicare approval emblem. To use the emblem on their cards, card sponsors will need to abide by these standards.

CMS is responsible for the review of information and outreach materials associated with this program. In addition, CMS is responsible for ensuring coordination of this process with the current Medicare managed care marketing review process.

Enrollment Processing/Transitional Assistance Eligibility

CMS has developed a system to review an individual’s eligibility for the Medicare drug discount card program and the transitional assistance. For individuals applying for the drug card, we will verify an individual’s eligibility by confirming the individual’s status as a Medicare beneficiary and his or her status in regard to receiving outpatient prescription drug assistance through title XIX or an 1115 waiver. We will assess the latter through files provided to us by the State Medicaid programs for this purpose.

We will also review the declared income of individuals applying for transitional assistance to ensure that it does not exceed 135% of the poverty line for their declared family size. This system consists of income and retirement benefit information provided by the Internal Revenue Service and the Social Security Administration, and possibly other data sources that we may choose to include. With regard to income and other benefits, we will take into consideration Social Security benefits, Railroad Retirement benefits, Veteran’s benefits, Supplemental Security Income benefits and Adjusted Gross Income as defined by the IRS.

To review income, we will use data sources that identify, for most individuals, the types of income we will count. An individual denied access to transitional assistance or the discount card may request that we reconsider our decision and provide us with information or an explanation regarding his or her prescription health insurance, income, family size, or Medicare status. We will contract with an independent review entity to conduct the reconsideration process.

We have also developed a database to track enrollment decisions by each individual and to ensure enrollment exclusivity. This system will track enrollments and disenrollments from card programs and will block new enrollments during any given enrollment year unless the enrollment occurs during the Annual Coordinated Election Period or a special election period is indicated. This system will also track whether an individual is enrolled in a Medicare managed care plan offering an exclusive card program.

Transitional Assistance Administration

CMS will maintain as part of its enrollment and eligibility system, a process for determining when a beneficiary is effectively enrolled and eligible for transitional assistance, the prorated assistance amount for the year (if applicable), and the monthly balance.

CMS will establish accounts for each card sponsor utilizing the Department of Health and Human Services (DHHS) Payment Management System (PMS). CMS will transmit to the PMS a withdrawal limit for each card sponsor based on projected enrollment initially and then adjusted periodically based on the number of enrolled beneficiaries determined eligible for transitional assistance, as provided by CMS’ Medicare Beneficiary Database (MBD) Drug Card enrollment system. Card sponsors will receive reimbursement for transitional assistance funds and enrollment fees by submitting daily electronic requests to the PMS. Those funds will be made available through the Federal Reserve to card sponsors’ bank accounts.

1.5 Period of Approval Agreement

CMS plans to approve all exclusive card programs that meet the qualifications in Section 3.0, and to permit successful applicants to market and label their programs as “Medicare-approved.” Announcements of the Medicare-approved discount card programs will begin in Spring 2004. The effective period for approval will be from May 3, 2004 through December 31, 2005, with card sponsors required to continue to make available to beneficiaries still enrolled on December 31, 2005 drug discounts and any remaining transitional assistance until each enrollee’s effective date of enrollment in a Part D drug plan or the last day of the open enrollment period for Part D. Card sponsors will not be permitted to accept new enrollments after December 31, 2005. There will be no renewal of the approval under section 1860D-31 of the Social Security Act after the initial period of approval.

After the initial application period, we will continue to accept applications for the approved card on a flow basis only when included as part of an application for a new Medicare managed care contract. No new applications will be accepted during contract year 2005 as part of CMS’ preparation for the transition to Medicare Advantage.

1.6 Eligible Applicants

The Applicant must currently operate as a Medicare managed care organization under a contract with CMS. CMS’s contract will be with only one non-governmental legal entity. The Medicare managed care organization must act as the sponsor and our contract will be with the Medicare managed care organization.

Although we will amend only one entity’s contract per approved discount card program, the Applicant may meet the qualifications in Section 3.0 by using its own capabilities or by combining its capabilities with other entities through contracts or other legal arrangement.

2.0 APPLICANT INSTRUCTIONS

2.1 Application, Intent to Respond, and Application Inquiries

The Medicare managed care organization seeking an agreement with CMS to offer a Medicare-approved discount card program may submit an application for approval for one or more exclusive drug discount cards into which members of one or more of its Medicare managed care plans may exclusively enroll. For example, a Medicare managed care organizations could offer exclusive card program A to members of its Medicare managed care plan A, exclusive card program B to members of its Medicare managed care plan B, and non-exclusive card C to all eligible Medicare beneficiaries except members of Medicare managed care plans offering exclusive drug discount cards (including members of Medicare managed care plans A and B). Medicare managed care plans that wish to offer a non-exclusive card program must submit a separate application using the General Solicitation.

We encourage applicants to submit only one application describing all the exclusive cards they may offer under their Medicare managed care offerings. However, for their own administrative convenience, Applicants may elect to submit a separate application for each drug discount card they intend to offer.

To assist CMS in planning for the review of applications and to assure that potential applicants are notified of any additional guidance posted on the web, and for future correspondence, potential applicants should notify CMS of their intention to apply by January 7, 2004. Applicants should send notice of their intent to apply (including the completed CMS Connectivity Request by mail, electronic mail, or fax to:

Kim August
Centers for Medicare & Medicaid Services (CMS)
Center for Beneficiary Choices
7500 Security Boulevard, Mail Stop C4-23-07
Baltimore, Maryland ###-###-####
Fax: 410 ###-###-####
E-Mail: ***@***

Applicants seeking the approval of multiple drug discount cards should submit only one notice of intent to apply. This intent to apply should indicate the applicant’s primary contact and include the contact’s:

Inquiries about the application, including questions for the pre-application conference and the intent to respond should be in writing and sent to: ***@***.

Please note that entities that submit notices of intent to apply are not obligated to submit an application for approval to CMS. However, CMS will not consider an application for approval from an entity that has not submitted a timely notice of intent to apply. CMS has adopted this policy because only Applicants who submit a timely Connectivity Request (as part of the notice of intent) can eventually demonstrate their ability to exchange data with CMS in time to begin enrollment activities on May 3, 2004.

2.2 Approach to Application, Qualifications, and Evaluation

An applicant must submit sufficiently comprehensive information to support the application. Using the prompts under the “Application Requirements” headings in Section 3.0, the applicant shall provide a description of the proposed program, demonstrating how it meets the qualifications described under the “Qualifications” headings in Section 3.0, and otherwise how the program will work. Also, an individual with legal authority to bind the Applicant shall sign and submit the certification found in Section 5.0.

CMS reserves the right to request clarifications or corrections to a submitted application.

Applicants are advised that the information in their applications will be referenced in their Part C or cost plan contract addendum.

This solicitation does not commit CMS to pay any cost for the preparation and submission of an application.

CMS reserves the right to amend or cancel this solicitation.

Applicant responses to the prompts in Section 3.0 of the application will provide the information necessary for CMS to determine, on the basis of a pass/fail evaluation, whether the proposed discount card program meets the qualifications outlined below. Only those discount card programs that meet all stated qualifications described in Section 3.0 will be approved. In addition, applicants must participate in telecommunications and systems testing processes as described on the CMS web site. The testing processes include demonstrating the ability to accurately submit and receive test files provided by CMS. An applicant will be required to successfully complete end-to-end system testing with CMS for transferring data before they can initiate their program. Although Medicare managed care organizations have existing connectivity to CMS, their ability to communicate with the eligibility and enrollment system must be established for this program.

Incomplete applications will not be considered.

2.3 Application Format

In preparing your application in response to the prompts in Section 3.0 of this solicitation, please repeat each question as stated, followed by your response. Provide complete answers, and detail the opportunities and value your discount card program offers to Medicare beneficiaries, in a clear, concise manner. If you have additional information you would like to provide, please include this information as an appendix to your application, and cross-reference its relation to the information requested.

In preparing your signed certification, please print out the certification provided in Section 4.0 of this solicitation and submit an original document signed by an individual with the legal authority to bind the Applicant.

To assure that each CMS review panelist receives the application in the manner intended by the applicant (e.g., collated, tabulated, colorized), applicants should deliver one (1) original and ten (10) copies of the written application with one (1) diskette or CD copy of the application in Microsoft Office format to the following address by 5:00 P.M. EST, January 30, 2004:

Centers for Medicare & Medicaid Services (CMS)
Center for Beneficiary Choices

Attn: Kim August

7500 Security Boulevard
Mail Stop C4-23-07
Baltimore, Maryland ###-###-####

CMS will not review applications submitted after the 5:00 P.M. deadline on January 30, 2004.

All copies and the original application should be in 3-ring binders. Tab indexing should be used to identify all major sections of the application. Page size should be 8 1/2 by 11 inches and the pages should be numbered. Type size should not be less than 12 point with a space and a half between lines.

2.4 Important Dates

Application Review Process

Implementation Process

NOTE: The earliest date card sponsors may begin enrolling beneficiaries in their drug cards is May 3, 2004. All of the dates stated in this solicitation assume that card sponsors are preparing to meet that milestone. However, Applicants should be aware that they will be required to have submitted to CMS completed contracts with their subcontractors and have had their information and outreach materials approved by CMS before they will be permitted to begin enrollment activities. The date each card sponsor may begin enrollment activities will be determined by the date by which each completes these two tasks.

2.5 Withdrawal of an Application

An applicant may withdraw an application at any time before an agreement becomes effective, by submitting a written notification for its withdrawal to the CMS contact noted above.

2.6 Amendments to an Application

Applicants are encouraged to provide sufficient documentation of qualification for approval at the time applications are due to CMS. However, CMS may award approvals on the basis of Applicants’ representations of arrangements (e.g. contracts with pharmaceutical manufacturers, network pharmacy contracts). In those situations, approved sponsors will be required to submit all required documentation to CMS before sponsors will be permitted to begin information and outreach and enrollment activities under the discount card program.

2.7 Protection of Commercial Information

Only information within a submitted application (or attachments thereto) that constitutes a trade secret, privileged or confidential information, (as such terms are interpreted under the Freedom of Information Act and applicable case law), and is clearly labeled as such by the Applicant, will be protected from release by CMS under 5 U.S.C. § 552(b)(4). Information not labeled as trade secret, privileged, or confidential will not be withheld from release under 5 U.S.C. § 552(b)(4).

2.8 Certification Instructions

Pursuant to the Certification Statement in Section 4.0, changes to the information furnished in this application must be reported to:

Centers for Medicare & Medicaid Services (CMS)
Center for Beneficiary Choices
Attention: Kim August
7500 Security Boulevard, Mail Stop C4-23-07
Baltimore, Maryland ###-###-####

2.9 Pre-application Conference

CMS will hold a pre-application conference on December 18-19, 2003 for all interested applicants. Applicants must pre-register for both sessions on-line at www.cms.hhs.gov under the drug card initiative) by 12 Noon on December 16, 2003. The purpose of this conference is to give applicants the opportunity to ask questions about this solicitation. The conference will include a break-out session for Medicare managed care organizations that wish to offer an exclusive card program. The conference will also include a session for applicants’ information systems staff during which CMS staff will make presentations on systems requirements related to the drug card program. There will also be a session to address the special approval for applicants interested in operating exclusive card programs, as well as discount card programs that serve I/T/U pharmacies, LTC facilities, and the U.S. territories. Questions submitted through ***@*** to CMS by 12 Noon on December 16, 2003 will have priority for oral response by CMS during the conference. Questions submitted after this date and from the floor will be addressed orally as time permits. CMS will post a summary of the questions and CMS responses on the CMS Web site at www.cms.hhs.gov.

2.10 Requests for Waived or Modified Qualifications

As noted above in the Overview (Section 1.2.), CMS will consider requests for waivers of Drug Card Program qualifications. The chart below indicates the qualifications we understand Medicare managed care contractors may find to conflict with or be duplicative of the requirements applicable to Medicare managed care organizations, or to interfere with the coordination of benefits offered under a Medicare+Choice or Medicare cost plan. Applicants should review the chart, including CMS’ rationale for how there might be proper basis for granting applying Applicants a waiver from such qualifications. If the Applicant believes the rationale for waiving a qualification applies to it, the Applicant may request a waiver of the identified qualification by stating “yes” in the far right column of the chart. For those qualifications for which the Applicant has requested a waiver, the Applicant should respond to the Application Requirements stated in this solicitation. For those qualifications for which the Applicant has not requested a waiver, the solicitation directs the Applicant to respond to the corresponding Application Requirement of the Solicitation for Applications for non-Medicare Managed Care Contractors (the General Solicitation) posted on the CMS Web site.

POTENTIAL SUBJECTS OF APPLICANT WAIVER/MODIFICATION REQUESTS

3.0 SUMMARY OF QUALIFICATIONS

3.1 Card Sponsor Organization, Structure, and Experience

3.1.1 Type of Applicant

Qualification:

3.1.2 Years of Experience

Qualifications

Request for Waiver: Applicants who requested a waiver of this qualification by completing the chart in Section 2.10 need not complete this section. Applicants who did not request a waiver should provide a response to the Application Requirements stated in Section 3.1.2 of the General Solicitation.

3.2 Formulary and Discounts to Beneficiaries

3.2.1 Formulary

Request for Waiver: Applicants who requested a waiver of this qualification by completing the chart in Section 2.10 must complete this section. Applicants who did not request a waiver should provide a response to Section 3.2.1 of the General Solicitation.

Qualifications:

3.2.2 Pricing/Rebates, Discounts, and Other Price Concessions

Qualifications:

Request for Waiver: Applicants who requested a waiver of this qualification by responding “yes” to Item 2 in the chart in Section 2.10 must complete this section. Applicants who did not request a waiver should provide a response to the Application Requirements stated in Section 3.2.2 of the General Solicitation.

3.3 Service Area and Access to Pharmacies

3.3.1 Service Area

Qualification:

Qualifications:

Qualifications:

3.5 Card Program Administration and Customer Service

3.5.1 Beneficiary Eligibility/Enrollment/Enrollment Fee

NOTE: Applicants should refer to Attachment 2 for an illustration of the Drug Card Enrollment Process

Qualifications:

Medicare managed care plan members and, if it chooses to do so, must include the drug card program as an additional benefit under its Adjusted Community Rate (ACR) filing. Should the Applicant charge a fee for its exclusive card program, the benefit would be considered an optional supplemental benefit.

Period (November 15, 2004 through December 31, 2004) effective the following January 1, 2005. Group enrollment (described below) is effective on the first of the month the Applicant reports as the first month of the program.

discounts, Applicant notifies enrollees that this is the case) – within 5 business days of group enrollment or of receipt of reply from CMS for all accepted enrollment/eligibility transactions. Applicant informs transitional assistance enrollees of the date the $600 becomes available for use and ensures enrollees understand the rules for accessing such assistance.

3.5.2 Transitional Assistance Eligibility Determination

Qualifications:

This data is collected on the transitional assistance enrollment form.

form to CMS according to the systems described on the CMS web site. CMS informs card sponsors whether the beneficiary is eligible for transitional assistance and if each beneficiary was enrolled in the transitional assistance program. Transitional assistance amounts will be prorated based on the date the beneficiary’s complete enrollment form is received by the Applicant during the second year of the discount card program (2005).

3.5.3 Reconsideration of Eligibility Determination

Qualifications

Application Requirements

3.5.4 CMS Reimbursement of Transitional Assistance

Qualifications:

o Amount spent from each transitional assistance enrollee’s subsidy balance for that month.

3.5.5 Card Sponsor Payment and Tracking of Transitional Assistance

Qualifications:

Medicare managed care prescription drug benefit it provides; specifically, Applicant may allow transitional assistance enrollees to utilize transitional assistance to assist in paying copayments, coinsurance, or deductibles for covered discount card drugs under any Medicare managed care drug benefit it provides. For covered discount card drugs obtained under the
exclusive card program, Applicant must apply such funds regardless of whether the particular drug being purchased is offered for a negotiated price by the sponsor. If no negotiated price is offered, the pharmacy’s usual and customary price shall prevail. The usual and customary price is the price that the pharmacy would charge a customer who does not have any form of prescription drug coverage. Transitional assistance funds may not be used to purchase over the counter drugs or to purchase or pay the cost-sharing for any drugs excluded from the definition of “covered discount card drug” as stated in 42 CFR § 403.802.

time the Applicant reported the final balance, nor will CMS provide additional reimbursement to the Applicant to make up the difference. If the Applicant’s systems for determining a final transitional assistance balance potentially creates a financial liability for enrollees, Applicant informs enrollees of such circumstances and the special responsibilities enrollees may have in such circumstances.

Application Requirement:

3.5.8 Grievance/Customer Complaints

Qualifications:

Application Requirements:

3.5.9 Information and Outreach

Qualifications:

description of other communication channels that will be used to educate and enroll Medicare beneficiaries (e.g., the Internet).

3.5.10 Privacy/HIPAA Transactions

Qualifications:

3.5.11 Security

Qualification:

You are encouraged, but not required, to use the Information Security Program references as provided by the National Institute of Standards and Technology (NIST) in describing your efforts to implement reasonable security measures.

3.6 Card Sponsor Reporting to CMS

Qualification:

Request for Waiver: Applicants who did not request any waivers requested by responding “yes” to any item on the chart in Section 2.10 must provide a response to Section 3.6 of the General Solicitation. Applicants who did request a waiver must meet the meet the qualifications as described below

Application Requirements:

Application Requirements:

card program for 6 years following the termination of the program or your contract with CMS.

3.8 Requests for Waiver or Modification of Requirements

Qualification:

2

4.0 CERTIFICATION

I, the undersigned, certify to the following:

3

ATTACHMENT 1 – DRUGS COMMONLY USED BY MEDICARE BENEFICIARIES

DRUGS COMMONLY USED BY MEDICARE BENEFICIARIES

Place a check mark next to the drugs listed below which will be included for a discount at your pharmacy network under your proposed program. This list represents top drugs commonly used by Medicare beneficiaries, according to results from the 2000 Medicare Current Beneficiary Survey.

NOTE: In some cases, both the brand name and its generic equivalent are listed separately.

4

ATTACHMENT 2

Drug Card Enrollment Process Flowchart

[CHART]

5

ATTACHMENT 3 – PAYMENT INFORMATION FORM

As Government vendors, organizations with Medicare contracts are paid by the Department of Treasury through an Electronic Funds Transfer (EFT) program. Government vendor payments are directly deposited into corporate accounts at financial institutions on the expected payment date. Additionally, CMS must have the EIN/TIN and associated name as registered with the IRS.

ORGANIZATION INFORMATION

NAME OF ORGANIZATION:

DBA, if any:

TIN/EIN NAME of business for tax purposes (as registered with the IRS: a W-9 may be required)

EMPLOYER/TAX IDENTIFICATION NUMBER (EIN or TIN):

CIRCLE ACCOUNT TYPE: CHECKING            SAVINGS (Please attach a copy of a voided check)

SIGNATURE & TITLE OF ORGANIZATION’S AUTHORIZED REPRESENTATIVE:

DATE:      

Signature Title

     Print Name Phone Number

ATTACHMENT 4 — Reporting Requirements

Routine Reporting Requirements

All data in this section are due to CMS on the 10^th business day of the month following the reporting period and the data are to reflect the activity for that reporting period only. For example, aggregated grievance data for the month of May 2004 are due to CMS by 5:00 pm ET on June14, 2004 and should reflect the grievance activity for May 2004; and, customer service data for the months of May, June, and July 2004 are due to CMS on August 13, 2004 by 5:00 pm ET and should reflect the customer service activity for May – July 2004. Exact due dates for all data will be posted on CMS’ website at www.cms.hhs.gov.

All data submissions to CMS must include a certification by the Sponsor that based on best knowledge, information, and belief, the reported information is accurate, complete, truthful, and supportable.

Applicant must report aggregated grievance and prescription data on a monthly basis and customer service information and information on price concessions and pass-through to beneficiaries on a quarterly basis directly into CMS’ Health Plan Management System (HPMS). Please refer to the instructions posted on CMS’ website at www.cms.hhs.gov for information about accessing HPMS. Applicant must report data on transitional assistance reimbursement on a monthly basis directly into the Medicare Beneficiary Database (MBD).

• Number and percent of beneficiary calls that are abandoned from automated queue;

Item 4 — Reporting requirements for price concessions and pass-throughs to beneficiaries, due quarterly, include:

Item 5 — Reporting requirements for transitional assistance reimbursement, due monthly, include:

Item 6 — Applicant must report to CMS immediately any aberrancies or high utilization and spend patterns (identified by Zip Code) observed in claims data for particular drugs/controlled substances. If no patterns are detected during a month, Applicant certifies to CMS, by the 10^th business day of the next month, that it checked for such patterns.

Reporting/monitoring requirements for irregular utilization patterns for specific drugs, due monthly, include:

Item 7 — Reporting requirements concerning any material modifications to the Card Sponsor’s drug card program (e.g., changes to formulary, pharmacy network, customer service practices), due as soon as they occur, include:

Item 8 — Reporting requirements for any increase in prices in a calendar year that are due to anything other than changes in average wholesale price (AWP), due with the submission of the price comparison files, include:

Note to above requirement: Sponsors do not have to report any increases in negotiated prices that occur during the week of November 15, 2004.

Item 9 — Claims-Based Data Elements

Our oversight strategy anticipates that we would audit the following claims-based data elements in the event we conduct an audit. At that time we will specify the format in which the data shall be provided.

Item 10 — Grievance-Based Data Elements

Our oversight strategy anticipates that we would audit grievance logs in the event we conduct an audit. At that time we will specify the format in which the data shall be provided.

covered by the discount card program at the time of purchase? (Note: long-term care and Indian health services may not be required to provide this service.)

6