Source: https://www.law.cornell.edu/cfr/text/42/423.104
Timestamp: 2017-05-25 18:17:02
Document Index: 141353253

Matched Legal Cases: ['art 423', '§ 423', '§ 423', '§ 423', '§ 423', '§ 423', '§ 423', '§ 423', '§ 423', '§ 423', '§ 423', '§ 423', '§ 423', '§ 423', '§ 422', '§ 422', '§ 422', '§ 417', '§ 417', '§ 417', '§ 417', '§ 423', '§ 423', '§ 423', '§ 423']

42 CFR 423.104 - Requirements related to qualified prescription drug coverage. | US Law | LII / Legal Information Institute
CFR › Title 42 › Chapter IV › Subchapter B › Part 423 › Subpart C › Section 423.104 42 CFR 423.104 - Requirements related to qualified prescription drug coverage.
§ 423.104 Requirements related to qualified prescription drug coverage.
(a)General. Subject to the conditions and limitations set forth in this subpart, a Part D sponsor must provide enrollees with coverage of the benefits described in paragraph (c) of this section. The benefits may be provided directly by the Part D sponsor or through arrangements with other entities. CMS reviews and approves these benefits consistent with § 423.272, and using written policy guidelines and requirements in this part and other CMS instructions.
(b)Availability of prescription drug plan. A PDP sponsor offering a prescription drug plan must offer the plan - (1) To all Part D eligible beneficiaries residing in the plan's service area; and
(c)Types of benefits. The coverage provided by a Part D plan must be qualified prescription drug coverage.
(d)Standard prescription drug coverage. Standard prescription drug coverage includes access to negotiated prices as described under paragraph (g)(1) of this section, provides coverage of Part D drugs, and must meet the following requirements
(1)Deductible. An annual deductible equal to - (i)For 2006. $250; or
(ii)For years subsequent to 2006. The amount specified in this paragraph for the previous year, increased by the annual percentage increase specified in paragraph (d)(5)(iv) of this section, and rounded to the nearest multiple of $5.
(2)Cost-sharing under the initial coverage limit.
(i) Subject to paragraph (d)(4) of this section, coinsurance for actual costs for covered Part D drugs covered under the Part D plan above the annual deductible specified in paragraph (d)(1) of this section, and up to the initial coverage limit under paragraph (d)(3) of this section, that is - (A) Equal to 25 percent of actual cost; or
(B) Actuarially equivalent to an average expected coinsurance of no more than 25 percent of actual cost, as determined through processes and methods established under § 423.265(c) and (d).
(ii)Tiered copayments. A Part D plan providing actuarially equivalent standard coverage may apply tiered copayments, provided that any tiered copayments are consistent with paragraphs (d)(2)(i)(B) and (d)(4) of this section and are approved as described in § 423.272(b)(2).
(3)Initial coverage limit. Except as provided in paragraphs (d)(4) and (d)(5) of this section, the initial coverage limit is equal to - (i)For 2006. $2,250.
(ii)For years subsequent to 2006. The amount specified in this paragraph for the previous year, increased by the annual percentage increase specified in paragraph (d)(5)(iv) of this section, and rounded to the nearest multiple of $10.
(4)Cost-sharing in the coverage gap for applicable beneficiaries.
(i) Coinsurance in the coverage gap (as defined in § 423.100) for costs for covered Part D drugs that are not applicable drugs (as defined in § 423.100) under the Medicare coverage gap discount program that is - (A) Equal to the generic gap coinsurance percentage described in paragraph (d)(4)(iii) of this section; or
(B) Actuarially equivalent to an average expected coinsurance for covered Part D drugs that are not applicable drugs under the Medicare coverage gap discount program, as determined through processes and methods established under § 423.265 (c) and (d).
(ii) Coinsurance in the coverage gap for the actual cost minus the dispensing fee and any vaccine administration fee for covered Part D drugs that are applicable drugs under the Medicare coverage gap discount program that is - (A) Equal to the difference between the applicable gap coinsurance percentage described in paragraph (d)(4)(iv) of this section and the discount percentage determined under the Medicare coverage gap discount program; or
(B) Actuarially equivalent to an average expected coinsurance for covered Part D drugs that are applicable drugs under the Medicare coverage gap discount program, as determined through processes and methods established under § 423.265 (c) and (d).
(iii)Generic gap coinsurance percentage. The generic gap coinsurance percentage is equal to - (A) For 2011, 93 percent.
(iv)Applicable gap coinsurance percentage. The applicable gap coinsurance percentage is equal to - (A) For 2013 and 2014, 97.5 percent.
(5)Protection against high out-of-pocket expenditures.
(i) After an enrollee's incurred costs exceed the annual out-of-pocket threshold described in paragraph (d)(5)(iii) of this section, cost-sharing equal to the greater of - (A)Copayments.
(1) In 2006, $2 for a generic drug or preferred drug that is a multiple source drug (as defined in section 1927(k)(7)(A)(i) of the Act) and $5 for any other drug; and
(B)Coinsurance. Coinsurance of five percent of actual cost.
(ii) As determined through processes and methods established under § 423.265(c) and (d), a Part D plan may substitute for cost-sharing under paragraph (d)(5)(i) of this section an amount that is actuarially equivalent to expected cost-sharing under paragraph (d)(5)(i) of this section.
(iii)Annual out-of-pocket threshold. For purposes of this part, the annual out-of-pocket threshold equals - (A)For 2006. $3,600.
(B)For each year 2007 through 2013. The amount specified in this paragraph for the previous year, increased by the annual percentage increase specified in paragraph (d)(5)(iv) of this section, and rounded to the nearest multiple of $50.
(C)For years 2014 and 2015. The amount specified in this paragraph for the previous year, increased by the annual percentage increase specified in paragraph (d)(5)(iv) of this section, minus 0.25 percentage point.
(D)For each year 2016 through 2019. The amount specified in this paragraph for the previous year, increased by the lesser of - (1) The annual percentage increase specified in (d)(5)(v) of this section plus 2 percentage points; or
(E)For 2020. The amount specified in this paragraph for 2013 increased by the annual percentage increases specified in paragraph (d)(5)(iv) of this section for 2014 through 2020, and rounded to the nearest $50.
(F)For 2021 and subsequent years. The amount specified in this paragraph for the previous year, increased by the annual percentage increase specified in paragraph (d)(5)(iv) of this section, and rounded to the nearest $50.
(iv)Annual percentage increase. The annual percentage increase for each year is equal to the annual percentage increase in average per capita aggregate expenditures for Part D drugs in the United States for Part D eligible individuals and is based on data for the 12-month period ending in July of the previous year.
(v)Additional annual percentage increase. The annual percentage increase for each year is equal to the annual percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending in July of the previous year.
(e)Alternative prescription drug coverage. Alternative prescription drug coverage includes access to negotiated prices as described under paragraph (g)(1) of this section, provides coverage of Part D drugs, and must meet the following requirements - (1) Has an annual deductible that does not exceed the annual deductible specified in paragraph (d)(1) of this section;
(4) Has an unsubsidized value that is at least equal to the unsubsidized value of standard prescription drug coverage. For purposes of this subparagraph, the unsubsidized value of coverage is the amount by which the actuarial value of the coverage exceeds the actuarial value of the subsidy payments under § 423.782 for the coverage; and
(f)Enhanced alternative coverage.
(1) Enhanced alternative coverage must meet the requirements under paragraph (e) of this section and includes-
(i) Basic prescription drug coverage, as defined in § 423.100; and
(A) Coverage of drugs that are specifically excluded as Part D drugs under paragraph (2)(ii) of the definition of Part D drug under § 423.100; or
(B) Any of the following changes or combination of changes that increase the actuarial value of benefits under the Part D plan above the actuarial value of defined standard prescription drug coverage, as determined through processes and methods established under § 423.265 - (1) A reduction in the annual deductible described in paragraph (d)(1) of this section;
(2)Restrictions on the offering of enhanced alternative coverage by PDP sponsors. A PDP sponsor may not offer enhanced alternative coverage in a service area unless the PDP sponsor also offers a prescription drug plan in that service area that provides basic prescription drug coverage.
(3)Restrictions on the offering of enhanced alternative coverage by MA organizations. Effective January 1, 2006, an MA organization - (i) May not offer an MA coordinated care plan, as defined in § 422.4 of this chapter, in an area unless either that plan (or another MA plan offered by the MA organization in that same service area) includes required prescription drug coverage; and
(ii) May not offer prescription drug coverage (other than that required under Parts A and B of title XVIII of the Act) to an enrollee - (A) Under an MSA plan, as defined in § 422.2 of this chapter; or
(B) Under another MA plan (including a private fee-for-service plan, as defined in § 422.4 of this chapter) unless the drug coverage under the other plan provides qualified prescription drug coverage and unless the requirements of paragraph (f)(3)(i) of this section are met.
(4)Restrictions on the offering of enhanced alternative coverage by cost plans.
(i) A cost plan that elects to offer qualified prescription drug coverage may offer enhanced alternative coverage as an optional supplemental benefit under § 417.440(b)(2)(ii) of this chapter only if the cost plan also offers basic prescription drug coverage. An enrollee in the cost plan may, at the individual's option, elect whether to receive qualified prescription drug coverage under the cost plan and, if so, whether to receive basic prescription drug coverage or, if offered by the cost plan, enhanced alternative coverage.
(ii) A cost plan that offers qualified prescription drug coverage as an optional supplemental benefit under § 417.440(b)(2)(ii) of this chapter may not offer prescription drug coverage that is not qualified prescription drug coverage. A cost plan that does not offer qualified prescription drug coverage under § 417.440(b)(2)(ii) of this chapter may offer prescription drug coverage that is not qualified prescription drug coverage under § 417.440(b)(2)(i) of this chapter.
(g)Negotiated prices - (1)Access to negotiated prices. A Part D sponsor is required to provide its Part D enrollees with access to negotiated prices for covered Part D drugs included in its Part D plan's formulary. Negotiated prices must be provided even if no benefits are payable to the beneficiary for covered Part D drugs because of the application of any deductible or 100 percent coinsurance requirement following satisfaction of any initial coverage limit. Negotiated prices must be provided when the negotiated price for a covered Part D drug under a Part D sponsor's benefit package is less than the applicable cost-sharing before the application of any deductible, before any initial coverage limit, before the annual out-of-pocket threshold, and after the annual out-of-pocket threshold. (2)Interaction with Medicaid best price. Prices negotiated with a pharmaceutical manufacturer, including discounts, subsidies, rebates, and other price concessions, for covered Part D drugs by the following entities are not taken into account in establishing Medicaid's best price under section 1927(c)(1)(C) of the Act - (i) A Part D plan, as defined in § 423.4; or
(iii) A qualified retiree prescription drug plan (as defined in § 423.882) for Part D eligible individuals.
(3)Disclosure.
(i) A Part D sponsor is required to disclose to CMS data on aggregate negotiated price concessions obtained from pharmaceutical manufacturers, as well as data on aggregate negotiated price concessions obtained from pharmaceutical manufacturers that are passed through to beneficiaries, via pharmacies and other dispensers, in the form of lower subsidies paid by CMS on behalf of low-income individuals described in § 423.782, or in the form of lower monthly beneficiary premiums or lower covered Part D drug prices at the point of sale.
(4)Audits. CMS and the Office of the Inspector General may conduct periodic audits of the financial statements and all records of Part D sponsors pertaining to any qualified prescription drug coverage they may offer under a Part D plan.
(h)Valid prescription. A Part D sponsor may only provide benefits for Part D drugs that require a prescription if those drugs are dispensed upon a valid prescription.
(i)Daily cost-sharing rate. Beginning January 1, 2014, a Part D sponsor is required to provide its enrollees access to a daily cost-sharing rate in accordance with § 423.153(b)(4).
[ 70 FR 4525, Jan. 28, 2005, as amended at 74 FR 1544, Jan. 12, 2009; 75 FR 19816, Apr. 15, 2010; 76 FR 21571, Apr. 15, 2011; 77 FR 22169, Apr. 12, 2012; 80 FR 7963, Feb. 12, 2015]
42 CFR 417.440 — Entitlement to Health Care Services From an HMO or CMP.
42 CFR 423.128 — Dissemination of Part D Plan Information.
42 CFR 423.566 — Coverage Determinations.
42 CFR 423.902 — Definitions.
42 CFR 423.886 — Retiree Drug Subsidy Amounts.
42 CFR 423.464 — Coordination of Benefits With Other Providers of Prescription Drug Coverage.
42 CFR 423.272 — Review and Negotiation of Bid and Approval of Plans Submitted by Potential Part D Sponsors.
42 CFR 423.907 — Treatment of Territories.
42 CFR 423.894 — Construction.
42 CFR 423.329 — Determination of Payments.
42 CFR 423.153 — Drug Utilization Management, Quality Assurance, and Medication Therapy Management Programs (MTMPs).
42 CFR 422.266 — Beneficiary Rebates.