Response Comments

DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, Maryland 21244-1850

CENTER FOR MEDICARE
TO:

Office of Management and Budget

FROM:

Lori Robinson, Director
Division of Plan Data
Medicare Drug Benefit and C & D Data Group
Center for Medicare

DATE:

December 8, 2015

SUBJECT:

Response to CMS-R-262 60-Day PRA comments

CMS appreciates the comments provided on the Paperwork Reduction Act (PRA) package CMS-R-262,
Plan Benefit Package (PBP) and Formulary Submission for Medicare Advantage (MA) Plans and
Prescription Drug Plans (PDP). Our responses to the comments submitted are below.
Plan Benefit Package (PBP) and Summary of Benefits (SB) Comments
1. PBP Section Rx
Pages 7 and 8: what are the different options in the drop downs for Tier 5 or Tier 6?
CMS RESPONSE: As indicated in the 2017 Tiers labels chart, the different options for the optional tiers
can be used as an excluded drug only tier or for other meaningful offerings, such as a $0 tier.
2. PBP Section Rx
Pages 12 and 13: Is the total inventory of options for Tier 5 or Tier 6 listed? Our common 5 Tier structure
with Specialty on Tier 5 is missing.
CMS RESPONSE: As indicated in the 2017 Tiers labels chart, there are several tier options under the 5
tier module with the specialty tier being tier 5 (e.g., Tier model 5A, 5C, 5D, 5E, and 5F).
3. PBP Section Rx
I am unable to locate the following PDF - Appendix_C_CY2017_PBP_screenshots_Tier_Models.pdf
CMS RESPONSE: This document is included in the PRA package found at
https://www.cms.gov/Regulations-and-

Guidance/Legislation/PaperworkReductionActof1995/Downloads/CMS-R-262.zip. The name of the
document is “508_2017 Tier Models_FINAL for PRA.PDF.”
4. PBP Section Rx
Page 29: The deductible question: "Indicate each tier for which the deductible will NOT apply" is a
double negative and leads to incorrect filing and causes confusion. Can this be changed to: "Indicate
each tier for which the deductible WILL apply".
CMS RESPONSE: CMS has reviewed this comment and will consider this enhancement for the next
contract year.
5. PBP Section Rx
The Medicare Rx - Tier Models have been updated to more closely reflect the industry standard tier
structure design.
We believe the 6 tier option outlined on the model form should also provide the option (as seen with
the 5 tier options) to offer a "Non-Preferred Drugs" tier versus only being able to offer a "Non-Preferred
Brand" Tier.
CMS RESPONSE: Many of the 5 tier options include the Non-Preferred Drug tier and optional 6th tier.
CMS believes this user can accomplish what they have described above with the proposed tier
structures for CY2017.
6. Formulary
We would like to take this opportunity to suggest that for the 2017 BID submission, the timeframe for a
2017 FRF initial release and subsequent pre-bid deadline update be changed.
Although it is helpful to have an FRF update available for 2017 filing purposes prior to the final bid
deadline - for the purposes of bid calculations - it would be better to have the FRF update file released at
least three weeks before the final bid submission due date in June. Thank you for your consideration of
this request.
CMS RESPONSE: CMS appreciates this feedback and will strive to make the 2017 updates available as
soon as possible.
7. Formulary - Supplemental File
CMS will collect a new supplemental file containing RxCUIs for the drugs not available at an extended
day's supply under the Part D plan's benefit.
We would suggest that if the plan chooses to restrict extended day supplies at a tier level (i.e. all drugs
on the Specialty Tier are not available at an extended day supply) that the plan NOT be required to
submit a supplemental file and instead be able to designate this in the PBP and HPMS formulary module
as applicable to the entire tier.
CMS RESPONSE: This is the way the supplemental file will work for next year. A supplemental file is
only needed if a plan chooses to restrict extended day supplies at a PARTIAL tier level. If the extended
day supply is at a full tier level, a supplemental file will not need to be uploaded.

8. Formulary tier models
We recommend that CMS allow formularies the flexibility of having 7 tiers so that health plans would be
able to provide members a chronic care tier, as well as a supplemental drug tier, if desired. The changes
creates a challenge in case a plan wants to include a Supplemental Tier but already has a 6th tier for
Select Care drugs.
CMS RESPONSE: CMS has reviewed this comment and will consider this enhancement for the next
contract year.
9. PBP Section Rx
To minimize any disruption in service to our members and to better manage member satisfaction, we
recommend that instead of using tier labels, plans be given the flexibility to place higher cost generics
into higher tiers and use tier numbers instead when referring to drug placement in their formularies. An
alternative to moving from tier labels to tier numbers will be to expand the brand tier labels to indicate
if generics are also tiered there.
The use of tier labels can be confusing to members since it does not always indicate exactly the type of
drugs included. For example, sometimes a generic drug could be in a tier that is named Preferred Brand.
Then the tier name becomes confusing and disingenuous.
CMS RESPONSE: This comment is not related to the PBP or the Formulary labels. It is regarding the
marketing approach of tiers to beneficiaries. CMS will consider these as part of future Part D marketing
instructions/guidance.
10. PBP Section Rx
We recommend that CMS allow health plans to move the Select Care Drugs (tier 6) to tier 1 to be more
consistent with the members’ understanding that as the tier numbers go up in value, so does the
associated cost-share with each tier.
The tier system is set up so that as the tier number rises, so does the member’s costs. But, Select care
drugs have low or generally no copays. Having Select care drugs as the highest tier is confusing for
members.
CMS RESPONSE: CMS has reviewed this comment and will consider this enhancement for the next
contract year.
11. Formulary – Submission file Drug Type Label
We recommend that CMS make the necessary correction in the formulary file record layout-Drug Type
Label so that a submission error does not occur when a label that is no longer allowed is used.
We also have a comment related to the new formulary file requirement (RxCUI supplemental file). This
requirement should clearly define whether prepackaged drugs or drugs not generally dispensed in
extended supplies (e.g. antibiotics) should be included in this file. It is not clear from the definition

whether the intent is to identify all drugs not available for dispensing at a 90 day supply or if the file is to
identify drugs the plan limits to 30 day supplies, if applicable.
This tier label was eliminated with the 2016 submission.
CMS RESPONSE: CMS has reviewed this comment and will consider this enhancement for the next
contract year.
12. PBP – Appendix C Rx Screenshots
Old language “non-Preferred Generic” is reflected in the screenshots. Since CMS did not indicate that
this tier label will be available in their 2017 Tier Labels & Hierarchy document, we recommend that CMS
clarify that it was their intention to use the term “Non-Preferred Generics” in the screenshots included
in Appendix C on (pgs. 6-6/68 of the supporting documentation.
CMS RESPONSE: CMS will update this terminology in the PBP for CY2017. We apologize for any
confusion from the current screenshots, as they will be fixed before the final release of the software.
13. PBP - General
For Rx, PBP occasionally inadvertently erases daily copay amounts after exiting/validating. We request
that CMS fix the Rx section in PBP so that daily copay amounts are saved when exiting/validating the
software
CMS Response: CMS has reviewed this comment and will consider this enhancement for the next
contract year. In some instances, the PBP purposefully clears out select data to ensure all necessary
validations are performed.
14. PBP - General
The Plan Benefit Package (PBP) screens cannot be viewed in whole without having to scroll
up/down/across. Because the screen does not display all the content at once when there is a large
amount of data to be entered, there is difficulty viewing the whole page to review the data elements.
We suggest the scroll feature be taken out to ensure better viewing of all data on the Plan Benefit
Package (PBP) screens.
CMS RESPONSE: The zoom can be fixed on an individual user’s computer. If the resolution is too big,
the user can zoom out and will then not have to scroll using the PBP screens.
15. PBP – Section C
Section C, Out of Network (OON): Requires the user to manually create groups of benefits rather than
matching the format in Section B. Due to the limit of groups in Section C and the need to include
multiple service categories in groups, the OON benefits can look confusing when in the plan finder and
Summary of Benefits. The manual grouping also increases the likelihood of data input errors. To avoid
misrepresenting cost shares for benefits, we request that CMS enhance the Out of Network section to
mirror Section B by having Section C broken out into each service category, numbers 1 through 20,

rather than requiring the user to manually group the service categories into a limited number of groups
with the same cost sharing.
CMS RESPONSE: CMS has reviewed this comment and will consider this enhancement for the next
contract year.
16. PBP – Plan Upload Screen
Screen is only large enough to display the first 3 numbers of the plan upload number. PBP Plan Upload
screen isn't large enough to see all data in this function and does not allow the user to enlarge it any
further. This means that the user is not able to confirm/check plan upload numbers on this screen. To
allow users to view the entire plan upload number on the PBP Plan upload screen, we request that CMS
enlarge the screen.
CMS RESPONSE: The zoom can be fixed on an individual user’s computer. If the resolution is too big, the
user can zoom out and will then be able to see all numbers of the plan upload number.
17. PBP – General
Summary: User receives error indicating that Tier 1 has not been selected, even though it has been on
screen Alternative – Tier Type and Cost Share Structure – Pre-ICL. The PBP software is producing an
error even though the user has selected the item requested. This appears to be a bug in the system. We
suggest that CMS revisit this piece of the software and address any bugs which may be causing this error
to occur.
CMS RESPONSE: CMS will thoroughly test the PBP software and will address any bugs that are found in
the software.
18. SB - Supplemental Gap
Summary of Benefits (SB) supplemental gap language is standardized and does not accurately reflect
benefit design according to the PBP entries. Plans cannot clearly outline their benefit design since the
gap language is standardized. To allow plans to outline their benefit design, we suggest the following
sentence be used to replace the current narrative: “Under this plan, you may pay even less for the
drugs on the formulary.”
CMS RESPONSE: The summary of benefits will not be generated out of the plan benefit package
software in 2017, so this comment is not applicable. CMS will be issuing additional guidance about the
summary of benefits for CY2017.
19. SB – Long Term Care
Summary of Benefits (SB) Long Term Care language is not variable according to the PBP entries. The
language states as follows: “If you reside in a long-term care facility, you pay the same as at a retail
pharmacy.” Plans do not have the flexibility to tailor the language in the Summary of Benefits to match
the benefit design filed by each plan. We request that CMS consider adjusting the SB Long Term Care
language to be variable according to the PBP entry. Specifically, we suggest the following sentence be

reflected as follows: “If you reside in a long-term care facility, you pay the same as at a [preferred]
[standard] retail pharmacy.”
CMS RESPONSE: The summary of benefits will not be generated out of the plan benefit package
software in 2017, so this comment is not applicable. CMS will be issuing additional guidance about the
summary of benefits for CY2017.
20. Formulary – Submission File Record Layout
Tier labels for Tier 1 and Tier 2 appear to be reversed. The tier reversal is confusing for submission. We
request that the tier labels for Tier 1 and Tier 2 be switched as a correction.
CMS RESPONSE: These labels will be fixed for the final CY2017 PBP.
21. PBP – Section Rx
Screenshots in Appendix C, PBP screenshots for section RX, pages 6-8 use old language of “NonPreferred Generics.” The “Non-Preferred Generics” language is no longer in use as of 2016 required CMS
change. We request that the language in the file be updated to match the 2016 CMS required change.
CMS RESPONSE: CMS will update this terminology in the PBP for CY2017. We apologize for any
confusion from the current screenshots, as they will be fixed before the final release of the software.
22. PBP – Section Rx:
With regards to tier labels, we would recommend that plans be given the ability to label the tiers based
on what is in the tier. For example: Currently we have some generics in the following tiers, but are
limited to the descriptions provided- Tier 3, preferred brand and Tier 4 nonpreferred brand. We believe
accurate labels such as "Preferred Brand with some Generics" and "Non-Preferred Brand with some
Generics" would better describe the contents of the tier to the member.
CMS RESPONSE: CMS has reviewed this comment and will consider this enhancement for the next
contract year.
23. PBP – Section B
Section B, CY 2017 PBP Data Entry System Screens, #9a Outpatient Hospital Services - Base 1, Page 102
In the 2016 Call letter, page 130, CMS mentioned that they would either remove or disable 9a entirely
and rename 9b. We were expecting to see this for 2017, but no changes appear to have been made.
Please note, if 9a is removed or disabled, the Maximum Enrollee Out-of-Pocket Cost type would need to
be updated in #9b ASC Services - Base 1 and #9c Outpatient Substance Abuse - Base 1.
CMS RESPONSE: After further consideration, CMS decided that no changes were needed to this section
of the PBP for CY2017.
24. PBP – Section Rx

Section Rx, CY 2017 PBP Data Entry System Screens, Medicare Rx - Tier Model (when a tier includes 5
tiers), page 7 The formulary tiers refer to non-preferred generics, however, the 2016 call letter, page
156 tier labeling and composition told us that non-preferred generics had to be change to "generic" and
it is not reflected in the documents we reviewed.
CMS RESPONSE: These tier labels will be fixed for the final CY2017 PBP.
25. PBP and Formulary – Tier labels
Currently, the tier label name corresponds to a type of drug, such a tier 1 = generic or tier 2 = preferred
generic. Historically, drug types have implied the general cost of a drug. For example, generic would
imply a low cost drug. Drug costs are shifting dramatically and it can make more sense to put a generic
drug on a higher tier where traditionally a brand drug would placed. Similarly, there are brand drugs
where it would make sense to place in the lower cost-share tiers that have typically been reserved for
generics.
We recommend CMS discontinue using the drug type and solely move to a tier numbering structure to
allow drug placement on a tier based purely on the drug cost and not the type of drug (generic or
brand). This would allow more flexibility in mixing generic and brand drugs of similar cost into a tier
rather than focusing on the type of drug in that tier. We feel this would make more sense to
beneficiaries to explain the drugs that falls within a certain price range fall under a specific tier.
We recommend CMS update the PBP to reflect a tier numbering structure and discontinue the use of
the drug type in the tier label name.
CMS RESPONSE: CMS has reviewed this comment and will consider this enhancement for the next
contract year.
26. PBP – Section B
Section B, CY 2017 PBP Data Entry System Screens, #14c Eligible Supplemental Benefits as Defined in
Chapter 4 - Base 1, Page 182 The enhanced benefit of Counseling Services needs to be clearly explained
in the description of benefit at top of page.
CMS RESPONSE: CMS will work to issue clearer guidance on the enhanced benefit of counseling
services.
27. PBP – Section B
Section B, CY 2017 PBP Data Entry System Screens, #3 Cardiac and Pulmonary Rehabilitation Services Base 3, Page 50 CMS questioned the co-payments that were entered. We would recommend that CMS
put in edits to limit the co-payments or coinsurance as they have with other categories. This would
prevent plans from entering cost sharing amount higher than CMS expects.
CMS RESPONSE: CMS has reviewed this comment and will consider additional cost-share limitations for
Cardiac and Pulmonary Rehabilitation Services in the future.
28. PBP – Section D

Section C, CY 2017 PBP Data Entry System Screens, Plan Deductible LPPO/RPPO Base 1, page 1. The
statement regarding what must be included in all OON Medicare covered services for LPPO and RPPO
(bottom left corner) we would like to recommend excluding ambulance services from the deductible
since they are typically not within a plans network.
CMS RESPONSE: CMS has reviewed this comment and will consider additional cost-share limitations for
Cardiac and Pulmonary Rehabilitation Services in the future.
29. Formulary - PA File Record Layout
Comment regarding the CY 2017 Prior Authorization File Record Layout: Please consider increasing the
maximum field length in the "Coverage Duration" field to accommodate for the different length of
therapy for novel Hepatitis C drugs (e.g., Harvoni, Sovaldi, etc.) that may vary depending on the past
medical history, cirrhosis history, and genotype and requires at least 500 characters to describe.
Comment regarding the 2017 Tier Labels and Hierarchy: We support the proposed 2017 Tier Labels and
Hierarchy changes to more closely reflect the industry standard tier structure design (specifically,
provision of option F):
Option F:
Tier 1: Preferred Generic
Tier 2: Generic
Tier 3: Preferred Brand
Tier 4: Non-Preferred Drug
Tier 5: Specialty Tier
Tier 6: Optional*
*The optional 5th or 6th tier can be used as an excluded-drug-only tier or for other meaningful offerings
such as a $0
CMS RESPONSE: CMS has reviewed this comment and will consider this enhancement for the next
contract year.
30. PBP – Section B
Section B, CY 2017 PBP Data Entry System Screens, #7h Psychiatric Services - Base 3, Page 90. The screen
reflects Occupational Therapy Services Notes, in the Psychiatric Services area, please update.
CMS RESPONSE: CMS will fix this error in the PBP screenshots. Thank you for bringing it to our
attention.
31. PBP – Section B
Section D, CY 2017 PBP Data Entry System Screens, Plan Premium/Rebate Reduction, Pg 19 Typically we
store premium estimates only in the BPT. Is this new screen, supposed to mirror the BPT entry? Will we
have to go back in after the benchmarks are released to update this field? For zero premium plans do
you enter zero? Since this is for the PBP only (Medicare A/B) where does the Part D portion get entered
to make it whole?

CMS RESPONSE: These screens are only available to cost plans, and they do not fill out the MA Bid
Pricing Tool. Since they do not fill out a BPT, these plan types fill this in the PBP.
32. PBP – Section Rx
Section Rx, CY 2017 PBP Data Entry System Screens, Alternative - Retail Pharmacy Location Supply - PreICL, page 34. The formulary tier labels appear to be set; however, on this screen and others, it appears
as though the plan may enter a tier description. Will these descriptions override the formulary tier
labels? If not, what is the purpose of plans inputting their own descriptions?
CMS RESPONSE: There is no tier description that a plan may enter. The formulary tier labels are
standardized and what will appear on all screens.
33. PBP and Formulary – Tier Labels
Regarding PBP Section Rx, Item 4, the Medicare Rx-Tier Models have been updated to more closely
reflect the industry standard tier structure design:
We support the change regarding 2017 new options for 3-Tier, 4-Tier, and 5-Tier structures that one tier
is labeled "Non-Preferred Drug" because this change conveys that the tier will contain both brands and
generics. However, the lower tiers in these options retain the brand and generic tier labels, which may
contribute to the common misconception that a tier labeled "Brand" contains only brands and a tier
labeled "Generic" contains only generics. We encourage CMS to offer tier labeling options that do not
depend on "brand" or "generic" as part of the label and urge the recognition that both brands and
generics can legitimately be placed on all tiers.
Industry is seeing significant prices increases for generics; the generic is not always cheaper than the
brand; and we expect this trend to continue. Plans need to balance the drug spend among tiers to meet
bid requirements and constraints. As more brands move to generic status, even more generics will need
to move to higher tiers in order for plans to remain compliant with bid guidance. Industry is not seeing
the generic prices falling after generic launches, as we have seen historically. These increases will further
lead to retiering of some generics.
Based on cost, marketplace trends, and bid guidance, distinctions between brands and generics are
blurring. For all these reasons, we believe low net cost to the member along with clinical
appropriateness should be guiding principles of formulary tiering, rather than the placement of generics
or brands within specific tiers.
We also encourage CMS to consider changing the labeling of the Specialty tier to better describe them
as high cost drugs, as many drugs that meet the CMS-specified financial threshold for placement in this
tier are not specialty medications.
Additional tier labeling options enables plans to clearly communicate the cost-sharing associated with
each tier while avoiding misconceptions regarding the mix of drug type composition on each tier.
Members and providers will be able to better identify lower cost or preferred drugs through use of tier
labels that clearly identify lower cost-sharing options rather than drug type labels.
Here are three potential recommendations for five-tier formulary structure:

(1) Provide an option that removes all tier labels except for the Specialty Tier, which we recommend be
renamed the High Cost Tier. All other tiers would be referenced using only the tier number
corresponding to each cost-sharing level. As generics & brands can be placed on any tier, including them
in the label can be confusing and lacks transparency. Here is the example the five-tier formulary for this
scenario.
Tier 1
Tier 2
Tier 3
Tier 4
Tier 5 - High Cost Tier
(2) Provide an option removing references to generics and brands from the tier labels and replacing
them with labeling that better corresponds to the cost sharing the member will experience. Here is the
example the five-tier formulary for this scenario.
Tier 1: Lowest Cost Sharing Preferred Drugs
Tier 2: Low Cost Sharing Preferred Drugs
Tier 3: Middle Cost Sharing Preferred Drugs
Tier 4: Higher Cost Sharing Non-Preferred Drugs
Tier 5: High Cost Tier
(3) If CMS maintain references to generics and brands, we recommend that tier labeling options be
provided that include both generics and brands in each label, as appropriate. This would enable plans to
clearly describe the drug types included on each tier. Here is the example the five-tier formulary for this
scenario.
Tier 1: Value Generics & Value Brands
Tier 2: Preferred Generics & Select Preferred Brands
Tier 3: Generics & Preferred Brands
Tier 4: Non-Preferred Generics &Non-Preferred Brands
Tier 5: High Cost Tier
CMS RESPONSE: CMS has reviewed this comment and will consider this enhancement for the next
contract year.
34. Formulary – Supplemental formulary file (Extended Day Supply)
Regarding CY2017 Formulary Changes, item 1, CMS will collect a new supplemental file containing
RxCUIs for the drugs not available for extended day's supply under Part D plan benefit. CMS has
proposed a new supplemental file containing RxCUIs for drugs that are not available with an extended
day supply. We do not believe that an additional supplemental file to identify these drugs at the
formulary level is necessary, as the submitted Plan Benefit Package (PBP) for a plan already identifies
drugs for a particular tier that are not available for an extended days supply. This information is also
reflected in the Summary of Benefits and Evidence of Coverage as part of the plan design. Furthermore,
submission of supplemental file updates during monthly formulary submission windows (e.g. additions
due to new drugs added to formulary, removals due to drugs removed from the Formulary Reference
File) would be duplicative of information already submitted on the formulary.

CMS RESPONSE: CMS has reviewed this comment and will consider the necessity of this file for the next
contract year.
34. PBP
Although many changes described in the presented documents apply to the BID submission and the
tools used, Commonwealth Care Alliance would like to take the opportunity and comment on the work
that needs to be done with regard to PBP software for FIDE SNPs. As a FIDE SNP, we feel the immediate
need is the ability for the PBP software to accept submission of Medicare & Medicaid covered benefits.
The current structure of the PBP requires plans like ours to submit many hard copy changes in order for
the Summary of Benefits (SB) to accurately reflect our benefit plan. The additional request for hard copy
changes places an onerous burden on us and makes it more difficult for us to meet some of the CMS
mailing timeframes. We encourage CMS to work with Medicaid and FIDE SNPs to develop an integrated
software program for FIDE SNPs. Commonwealth Care Alliance feels the PBP software used by the
Medicare-Medicaid Plans is a first step in developing this software. Additional work is required.
CMS RESPONSE: CMS has reviewed this comment and will consider this enhancement for the next
contract year.
If you have any questions regarding our responses, please contact Sara Walters at
sara.walters@cms.hhs.gov or 410-786-3330.
Thank you.