Key Changes Made In Final Chapter 9 Of The Prescription Drug Benefit Manual
Wendy L. Krasner and Gregory W. FortschAmerican Health Lawyers AssociationMay 05, 2006
IntroductionThe much-anticipated final version of Chapter 9 of the Prescription Drug Benefit Manual was released by the Centers for Medicare and Medicaid Services (CMS) on April 25, 2006. This article focuses on the key changes made in the final version, which include:
Chapter 9, entitled the "Part D Program to Control Fraud, Waste and Abuse," was released in draft by CMS in February 2006 for public review and comment. The purpose of the final chapter is to identify how Sponsors can meet their legal obligations to establish a comprehensive FWA plan to detect, correct, and prevent FWA as required by statutory and regulatory provisions. In a May 2, 2006 Special Open Door Forum on the final chapter, CMS officials stated that Sponsors must have their FWA plans "in line with" the recommendations and requirements set forth in the final chapter by January 1, 2007.
Discretion and the Ability to Delegate
The final chapter emphasizes the "discretion" Sponsors have in adopting the methods suggested for implementing a FWA program. One example of this "discretion" is the ability of Sponsors to delegate FWA oversight to first tier, downstream, and related entities. For instance, the final chapter now allows Sponsors to receive certifications or assurances from first tier, downstream, and related entities that those entities have:
Of course, Sponsors should monitor the duties they delegate. The final chapter adds a recommendation that Part D compliance officers at the Sponsor level have the authority to conduct and direct internal audits and investigations of any first tier, downstream, or related entities (Section 188.8.131.52).
Making the Chapter Consistent with Statutory and Regulatory Provisions
Trend Toward Elimination or Modification of Time Requirements
Another significant change made in the final chapter is that CMS no longer recommends that general compliance training be a minimum of two hours and specialized compliance training be a minimum of four hours (Sections 184.108.40.206 and 220.127.116.11). Also, the final chapter now recommends policies and procedures that ensure Sponsors' review of OIG and GSA exclusion lists only once a year after new employees have been hired (Section 18.104.22.168).In addition, the chapter no ionger requires that training session materials be retained for a minimum of ten years (Section 22.214.171.124). Finally, CMS now allows Sponsors to refer potentially fraudulent activity to Medicare Drug Integrity Contractors (MEDICs) within two weeks from when such activity has been discovered (Section 126.96.36.199) as opposed to the immediate referral recommended in the draft chapter.
Against the trend in the chapter toward reductions or eliminations of burdensome time requirements, CMS imposed one new time requirement for Sponsors to initiate investigations of inquiries from a hotline complaint within two weeks of receiving the complaint.
Self-Reporting Is Voluntary
The final chapter reaffirms that self-reproofing of potential FWA is voluntary (Section 188.8.131.52). The chapter does, however, add a recommendation that Sponsors should not only report fraud at their level but also at the first tier, downstream, and related entity levels (Section 184.108.40.206). CMS also lessens the burden of self-reporting on Sponsors by increasing the time for reporting it to MEDICs from thirty to sixty days (Section 220.127.116.11). Finally, the chapter emphasizes that Sponsors are not required to develop Special Investigation Units (SIUs) as part of their internal monitoring and audit compliance functions if they do not already have them in place (Section 18.104.22.168).
Now that the final chapter has been released, the challenge for Sponsors and other Part D stakeholders is to address and implement the dizzying array of requirements and recommendations in a way that ensures compliance with Part D Program requirements and guidance and, at the same time, is not overly burdensome to the everyday operation of their businesses.
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