Medicare Part D was established by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.beneficiaries have been able to obtain prescription drug coverage through prescription drug plans offered by Part D plan sponsors that contract with CMS. Plan sponsors offer prescription drug coverage through stand-alone prescription drug plans (PDP) or through Medicare Advantage prescription drug plans (MA-PD), which combine medical and prescription drug benefits. In 2013, CMS had 75 PDP and 555 MA-PD contracts with Part D plan sponsors that together offered 2,660 plans. About 64 percent of beneficiaries with a Part D plan enrolled in PDPs and 36 percent enrolled in MA-PDs. Part D plan sponsors are required to offer plans that provide a minimum set of benefits to beneficiaries—the standard benefit—or an actuarially equivalent benefit. Under the standard benefit, beneficiaries pay monthly premiums and cost-sharing for drug purchases. Cost-sharing varies over the course of the year as beneficiaries move through the phases of the benefit. The standard benefit features a deductible and an initial coverage period during which beneficiaries pay coinsurance for prescription drugs until they reach the initial coverage limit. After the initial coverage period, beneficiaries enter the coverage gap, which is followed by the catastrophic coverage period in which beneficiaries pay a small share of total drug costs (see fig. 1). In addition to the standard Part D benefit, plan sponsors can offer a range of plans with different benefit structures that are actuarially equivalent to, or exceed the standard benefit. Under these plans, monthly premiums and cost-sharing arrangements can vary. For example, plans with enhanced benefits may charge higher monthly premiums than standard benefit plans, but may offer lower cost-sharing arrangements, such as a reduction or elimination of a deductible. Under Part D, certain individuals are also entitled to a low-income subsidy (LIS), through which they get reduced premiums and generally have zero or nominal cost-sharing. Subject to certain rules, the prescription drugs covered by Part D plans and the cost-sharing arrangements for covered drugs may differ between plans. Each Part D plan has a formulary—a list of the prescription drugs that it covers and the terms under which they are covered. While each plan may vary in the specific drugs it covers, plans must adhere to a minimum set of formulary requirements established in statute and regulation. In addition, a plan’s formulary may assign drugs to tiers that correspond to different levels of cost-sharing. For example, plans often assign generic drugs to the tier that requires the lowest cost-sharing level. Plans have flexibility in how they structure tiers, and different plans may place the same drug in different tiers. Plans may also subject drugs to utilization management practices, such as a limit on the amount of a drug that is covered. Part D cost-sharing for beneficiaries may also vary based on the pharmacies they use. Plan sponsors contract with retail and mail order pharmacies to dispense the drugs that plans cover. Plan sponsors negotiate the prices for covered drugs with pharmacies, and may negotiate different rates with different pharmacies. Some plans have “preferred” pharmacies within their pharmacy network that have agreed to offer drugs at lower cost-sharing levels. Since the beginning of the Part D program, CMS has administered the Plan Finder website to assist beneficiaries and their advisers in assessing Part D plan options by providing them with information on plan coverage and quality, and by estimating their annual drug costs. Beneficiaries can use Plan Finder to evaluate their plan options when they first become eligible for Part D or to reevaluate their options during the open enrollment period each year, and they can enroll in a plan through the website. To compare plans in Plan Finder, beneficiaries work their way through the website by entering information on where they live, the drugs they take, and the pharmacies they use. Plan Finder then identifies Part D plan options available to them and estimates their annual drug costs for each plan at their selected retail and mail order pharmacies (see fig. 2). It also provides information on how beneficiaries’ monthly drug costs change as they move through the Part D benefit over the course of the year. In addition to the website, customer service representatives for 1-800-MEDICARE—a nationwide toll-free telephone help line that beneficiaries and their advisers can call to ask questions about Medicare—also use a version of Plan Finder to provide information on Part D plan options and to enroll beneficiaries over the phone. CMS is responsible for overseeing plan sponsors’ compliance with their Part D contracts. CMS imposes program requirements on Part D plan sponsors—including a requirement that they submit accurate drug price, formulary, and pharmacy network information for Plan Finder—and sponsors are subject to possible compliance and enforcement actions for failure to meet those requirements. In addition, compliance and enforcement actions are included in the plan sponsor’s record of past performance, which CMS considers when reviewing applications for new or expanded Medicare contracts submitted by that plan sponsor. CMS can impose a range of compliance and enforcement actions to ensure compliance with program requirements, including requirements related to Plan Finder. The lowest-level compliance action is a notice of noncompliance, which notifies the Part D plan sponsor that it is in violation of program requirements under the terms of one or more of its contracts. The notice of noncompliance requests that the plan sponsor address the problem. If the noncompliance continues, CMS may issue a warning letter. significant number of beneficiaries, represents an ongoing or systemic inability to adhere to program requirements, or is particularly egregious, CMS may require the plan sponsor to develop and implement a corrective action plan. The corrective action plan must address the deficiencies identified by CMS, provide an attainable time frame for implementing corrective actions, and include a process for validating and monitoring that the corrective actions were taken and remain effective. CMS can also take enforcement actions for persistent noncompliance or to address more significant violations. Enforcement actions include civil money penalties; marketing, enrollment, and payment suspensions; and contract terminations. The nature of each instance of noncompliance is considered when determining the appropriate compliance or enforcement actions, and the actions generally proceed through the process in a step-by-step manner. However, for more serious violations, CMS may choose to immediately proceed to later-stage compliance or enforcement actions. In some instances, CMS may request in the warning letter that the sponsor submit a business plan for resolving issues related to the noncompliance. CMS also oversees the Part D program through its Star Ratings, which assigns scores to Part D contracts every year across a range of quality measures. CMS collects performance data on Part D plans covered under each individual contract for 18 quality measures—including a measure for Plan Finder drug pricing accuracy. CMS aggregates these quality measure scores and assigns an overall quality score between one and five stars, with five being the highest, to each contract. Each contract’s overall score and individual quality measure scores are applied to all plans covered under the contract, and CMS posts plans’ scores on the Plan Finder website to help beneficiaries choose high-quality plans.CMS also considers Star Ratings performance when reviewing sponsors’ applications for new or expanded Medicare contracts. To assess the accuracy of pricing information on Plan Finder, CMS performs computerized data checks on pricing information before it is displayed on Plan Finder and has taken compliance actions against certain Part D plan sponsors for submitting inaccurate and incomplete pricing information. In addition, CMS uses quality measures to retrospectively evaluate the accuracy of pricing information on Plan Finder. CMS performs computerized data checks to identify incomplete and potentially inaccurate pricing information before it is posted to Plan Finder. CMS requires Part D plan sponsors to submit drug pricing information for their plans on a biweekly basis—which Plan Finder uses to estimate beneficiaries’ cost-sharing amounts and expected drug costs. In 2013, CMS performed a set of over 25 data checks on the biweekly submission for each plan, including checks to identify outlying drug prices significantly higher or lower relative to the prices submitted by other plans and checks to identify missing data. If CMS’s data checks identify potentially inaccurate plan pricing information, CMS notifies the sponsor of the plan and gives the sponsor an opportunity to attest to the accuracy of the data, or correct it. If the sponsor does not verify or correct the pricing information, CMS will “suppress” the plan from Plan Finder for two weeks, or longer if the sponsor does not provide accurate pricing information for the next biweekly data update. When a Part D plan is suppressed from Plan Finder, its pricing information is removed and beneficiaries cannot enroll in the plan through the website. Plan Finder displays a warning notice alerting beneficiaries that the plan’s pricing information is unavailable and that they must contact the plan directly for cost information as well as to enroll. In 2012, 18 percent of Part D contracts had one or more plans that were suppressed from Plan Finder at least once, and, from January 1, 2013, through July 31, 2013, 25 percent of contracts had one or more plans that were suppressed at least once (see table 1). In addition to these quality assurance checks, CMS officials noted that they may identify Plan Finder pricing inaccuracies based on feedback provided by beneficiaries and organizations that provide assistance to beneficiaries, such as the State Health Insurance Assistance Programs (SHIP). According to CMS officials, SHIPs and other stakeholders can report inaccurate prices or other concerns through a Plan Finder email inbox maintained by CMS, and beneficiaries can report inaccuracies through 1-800-MEDICARE. SHIPs are state agencies that provide counseling and assistance to Medicare beneficiaries. noncompliance and 67 warning letters for inaccurate or incomplete drug pricing information. According to CMS documents, there has only been one instance in which CMS required a Part D plan sponsor to develop and implement a corrective action plan for compliance concerns related to Plan Finder pricing accuracy.