Medicare-Prescription Drug Coverage
CENTERS FOR MEDICARE AND MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES
Authorized under the Medicare Prescription Drug, Improvement and Modernization Act of 2003, Public Law 108-173, as Section 1860D of the Social Security Act.
To provide prescription drugs to Medicare beneficiaries through their voluntary participation in prescription drug plans, with an additional subsidy provided to lower-income beneficiaries.
Types of Assistance
Direct Payments for Specified Use.
Uses and Use Restrictions
Payments will be made to participating prescription drug plans.
A non-governmental entity organized and licensed under State law as a risk-bearing entity eligible to offer health insurance in each State in which it is to offer a plan, meeting the requirements in 42 CFR 423.504 and 42 CFR 423.505.
Individuals who are entitled to Medicare benefits under Part A or enrolled in Part B, who reside in the plan's service area, and who are not enrolled in a Medicare Advantage plan, other than a Medicare savings account plan or private fee-for-service plan that does not provide qualified prescription drug coverage.
Application and Award Process
This program is excluded from coverage under E.O. 12372.
Potential sponsors apply to CMS to become an approved prescription drug plan. Generally, individuals enroll directly with the prescription drug program sponsor. The sponsor forwards the enrollment and eligibility information to CMS, which verifies eligibility for the drug benefit. Some individuals who are entitled to both Medicare and Medicaid have been enrolled automatically. Low income beneficiaries may complete a subsidy application at any Social Security office or through their State Medicaid office.
Payment will be made by CMS to the prescription drug plan sponsors.
Beneficiaries must enroll according to the enrollment periods specified in 42 CFR 423.38. Plans must submit bids by the first Monday in June of the year proceeding the calendar year they wish to participate.
Range of Approval/Disapproval Time
Up to six months for plan sponsors.
Sponsors whose applications to become a prescription drug plan sponsor are rejected have the right to a reconsideration and appeal process. Beneficiaries have the right to a reconsideration and appeal process for adverse coverage determinations.
Formula and Matching Requirements
Length and Time Phasing of Assistance
Post Assistance Requirements
Plans must provide periodic reports to CMS, enrollees and the general public on cost; utilization; availability, accessibility and acceptability of services; fiscal soundness and other information required by CMS. Plans must provide an annual report of business transactions and combined financial statements. Also, reports as required under the Employee Retirement Income Security Act of 1974.
Periodic audits of plans by HHS, the Comptroller General or their designees. Periodic audits by CMS and the HHS Office of Inspector General (OIG) of plan cost reporting. Audit by CMS of financial records of at least one-third of participating plans every year.
(Benefit Outlays) FY 07 $49,103,284,000; FY 08 est $45,087,000,000; and FY 09 est $54,815,000,000.
Range and Average of Financial Assistance
Determined by plan offerings,number of enrollees and utilization.
As of January 30, 2007, approximately 39 million enrollees had comprehensive drug coverage.
Regulations, Guidelines and Literature
Regulations governing this program were authorized under Section 1860D of the Social Security Act, as enacted under Public Law 108-173, and were published on January 21, 2005.
Regional or Local Office
Program Contacts: Eligibility and enrollment: Lynn Orlosky, Centers for Medicare and Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850. Telephone: (410) 786-9064. Benefits and beneficiary protections: Vanessa Duran, Centers for Medicare and Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850. Telephone: (214) 767-6435. Plan bidding process: Mark Newsom, Centers for Medicare and Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850. Telephone: (410) 786-3198.
Web Site Address
93.773, Medicare-Hospital Insurance
93.774, Medicare-Supplementary Medical Insurance
93.778, Medical Assistance Program
Examples of Funded Projects
Criteria for Selecting Proposals