type: other

jurisdiction: US

text: b' DEPARTMENT OF HEALTH & HUMAN SERVICES Office of Inspector General\n\n\n Washington, D.C. 20201\n\n\n\n\nJune 1, 2010\n\nTO: Marilyn Tavenner\n Acting Administrator and Chief Operating Officer\n Centers for Medicare & Medicaid Services\n\n /Joseph J. Green/ for\nFROM: Joseph E. Vengrin\n Deputy Inspector General for Audit Services\n\n\nSUBJECT: Medicare Part D \xe2\x80\x93 Prescription Drug Event Reconciliation Process\n (A-18-08-30102)\n\n\nThis memorandum transmits the results of our performance audit of the Centers for Medicare &\nMedicaid Services\xe2\x80\x99 (CMS) Medicare Part D Prescription Drug Event (PDE) reconciliation\nprocess. We contracted with the independent certified public accounting firm of KPMG, LLP\n(KPMG), to perform the audit. The contract required that the audit be performed in accordance\nwith auditing standards generally accepted in the United States of America.\n\nResults of Performance Audit\n\nOn November 15, 2005, Medicare Part D, the prescription drug coverage program for senior and\nother eligible citizens, went into effect. Under this program, private health insurance companies\nand organizations (Plan sponsors) offer insurance coverage for prescription drugs in which\nMedicare and eligible Medicaid recipients can enroll. CMS contracted with Plan sponsors\nnationwide to offer the Part D benefits for qualified beneficiaries on January 1, 2006.\n\nOur audit objectives were to determine whether CMS controls over payments to Plan sponsors,\nPDE records, and year-end reconciliation provided reasonable assurance that: (1) the inputs that\ndrive the calculation of monthly payments are accurate and complete; (2) the Risk Adjustment\nFactor calculations by the Risk Adjustment Processing System are accurate; (3) monthly\npayments are accurately calculated and are tracked; (4) submitted PDE records are valid,\naccurate, and complete; (5) PDE data are complete before year-end reconciliation; and (6) Direct\nor Indirect Remuneration (DIR) reporting is accurate and complete.\n\nCMS has designed a layered compliance framework that uses as inputs beneficiary reported\ncomplaints, internal data analysis results, audits, and other continuous oversight activities to take\ncompliance action against Plan sponsors when needed. In addition, monthly payments are\naccurately being calculated and tracked. However, (1) the bid review and audit process needs\n\x0cPage 2 \xe2\x80\x93 Marilyn Tavenner\n\n\nimprovement to ensure that inputs to monthly payments are accurate and complete; (2) controls\nneed to be improved to ensure that submitted PDE records are accurate and complete and PDE\ndata are complete before year-end reconciliation; and (3) improved benchmarks and metrics are\nneeded to ensure the completeness and accuracy of DIR before reconciliation.\n\nThe attached report contains detailed recommendations for strengthening CMS\xe2\x80\x99s internal\ncontrols and improving the effectiveness of its PDE Reconciliation process. CMS agreed with\nmost of our recommendations. For those recommendations with which CMS did not agree, we\neither revised the report or provided clarification.\n\nMonitoring of Audit Performance\n\nWe reviewed the performance audit by:\n\n \xef\x82\xa7 evaluating the independence, objectivity, and qualifications of the auditors;\n\n \xef\x82\xa7 reviewing the approach and planning of the audit;\n\n \xef\x82\xa7 attending key meetings with auditors and CMS officials;\n\n \xef\x82\xa7 monitoring the progress of the audit; and\n\n \xef\x82\xa7 reviewing the auditors\xe2\x80\x99 reports.\n\nKPMG is responsible for the attached auditors\xe2\x80\x99 report and the conclusions expressed in the\nreport. Our monitoring review, as limited to the procedures listed above, disclosed no instances\nin which KPMG did not comply, in all material respects, with U.S. generally accepted\ngovernment auditing standards.\n\nSection 8L of the Inspector General Act, 5 U.S.C. App., requires that the Office of Inspector\nGeneral (OIG) post its publicly available reports on the OIG Web site. Accordingly, this report\nwill be posted at http://oig.hhs.gov.\n\nPlease send us your final written management decision, including any action plan, as appropriate,\nwithin 60 days. If you have any questions or comments about this report, please do not hesitate\nto call me, or your staff may contact Lori Pilcher, Assistant Inspector General for Grants,\nInternal Activities, and Information Technology Audits, at (202) 619-1175 or through email at\nLori.Pilcher@oig.hhs.gov. Please refer to report number A-18-08-30102 in all correspondence.\n\n\nAttachment\n\x0cPage 3 \xe2\x80\x93 Marilyn Tavenner\n\n\n\ncc:\nJonathan Blum\nDeputy Administrator and Director\nCenter for Medicare, CMS\n\nDeborah Taylor\nActing Director and Chief Financial Officer\nOffice of Financial Management, CMS\n\nRichard Foster\nChief Actuary\nOffice of the Actuary, CMS\n\x0c CENTERS FOR MEDICARE AND \n\n MEDICAID SERVICES \n\n\n\nPrescription Drug Event (PDE) Reconciliation\n Process Performance Audit\n\n\n\n Prepared for the Office of Inspector General\n U.S. Department of Health and Human Services\n\n\n\n By KPMG LLP\n\n As of October 23, 2009\n\x0c TABLE OF CONTENTS \n\n\n Page \n\n\nEXECUTIVE SUMMARY .......................................................................................................... 1\n\xc2\xa0\n\nBACKGROUND ....................................................................................................................... 6\n\xc2\xa0\n\nOBJECTIVE, SCOPE, AND METHODOLOGY ........................................................................ 6\n\xc2\xa0\n\nRESULTS................................................................................................................................. 7\n\xc2\xa0\n\nCONCLUSION ....................................................................................................................... 17\n\xc2\xa0\n\nAPPENDIX A \xe2\x80\x93 PROCESS FLOW DESCRIPTION ............................................................... 19\n\xc2\xa0\n\nAPPENDIX B \xe2\x80\x93 ACRONYMS ................................................................................................. 24\n\xc2\xa0\n\nAPPENDIX C \xe2\x80\x93 MANAGEMENT RESPONSE ....................................................................... 26\n\xc2\xa0\n\x0c KPMG LLP\n 2001 M Street, NW\n Washington, DC 20036\n\n\nEXECUTIVE SUMMARY\n\n\nApril 30, 2010\n\nMr. Edward Meyers\nDirector, Information Systems Audit and Advanced Techniques Staff\nU.S. Department of Health and Human Services\nOffice of Inspector General, Office of Audit Services (OIG/OAS)\n330 Independence Avenue SW\nWashington, DC 20201\n\nMr. Meyers:\n\nThis report presents the results of our work conducted to address the performance audit objectives relative\nto Centers for Medicare and Medicaid\xe2\x80\x99s (CMS) Prescription Drug Event (PDE) Reconciliation Process.\nOur fieldwork was performed during the period of March 10, 2009 through October 23, 2009, and our\nresults are as of September 30, 2009.\n\nWe conducted this performance audit in accordance with generally accepted government auditing\nstandards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate\nevidence to provide a reasonable basis for our findings and recommendations based on our audit\nobjectives. We believe that the evidence obtained provides a reasonable basis for our findings and\nrecommendations based on our audit objectives.\n\nThis executive summary provides a brief overview of our performance audit objectives and methodology,\nand a summary of results. The remainder of our report more fully describes our audit scope and\nperformance audit results.\n\nThis performance audit focused on assisting the OIG in understanding the design and effectiveness of\nCMS\xe2\x80\x99s controls to (1) accurately calculate and track monthly plan sponsor payments, (2) identify\nincomplete and/or inaccurate PDE records received, and (3) determine completeness of Prescription Drug\nEvent records prior to year-end reconciliation for the purpose of determining risk-sharing amounts and\nadjustments to risk corridors.\n\nTo evaluate CMS\xe2\x80\x99s controls over payments to plan sponsors, PDE records, and year-end reconciliation, we\ndeveloped audit procedures to determine whether internal controls provide reasonable assurance that:\n\n\xef\x82\xb7\t The inputs that drive the calculation of monthly payments to plan sponsors are accurate and complete\n\xef\x82\xb7\t The Risk Adjustment Factor (RAF) calculations by the Risk Adjustment Processing System are\n accurate\n\xef\x82\xb7\t Monthly payments are accurately calculated and are tracked\n\xef\x82\xb7\t Submitted PDE records are valid, accurate, and complete\n\xef\x82\xb7\t PDE data is complete prior to year-end reconciliation\nDirect or Indirect Remuneration (DIR) reporting is accurate and complete.\n\n 1\n KPMG LLP, a U.S. limited liability partnership, is the U.S.\n member firm of KPMG International, a Swiss cooperative.\n\x0cTo conduct our performance audit, we developed a risk-based work program that included steps to address\neach audit objective. We used the following references, Control Objectives for Information and\nTechnology, the CMS Prescription Drug Benefits Manual, and the Medicare Modernization Act (MMA),\nto help identify the control requirements and to obtain an understanding of the required processes,\nprocedures, and controls. We conducted the audit procedures for each of the audit objectives by performing\ninquiries, making observations, and examining documentation. We used a sampling approach in instances\nwhere a test of controls was conducive to sampling.\n\nBased on our procedures, we noted that CMS has designed a layered compliance framework that uses as\ninputs beneficiary reported complaints, internal data analysis results, audits, and other continuous oversight\nactivities to take compliance action against plan sponsors where needed. In addition, we understand that\nthe current Part D program design disadvantages CMS from an internal control perspective as critical data\nneeded for year-end reconciliation, including PDE records and DIR information, is self-reported by plan\nsponsors. In addition, CMS is limited in its ability to react to plan sponsor bid audit results due to the\nProgram\xe2\x80\x99s complexity and statutory framework. Furthermore, while CMS performs statutorily mandated\naudits of one-third of plan sponsors for each year, these reviews do not provide for timely assessment of\nthe accuracy and validity of plan sponsor reported information. However, CMS should do more to close the\ninherent internal control disparity that exists in the program. As such, we encourage CMS to implement\nmore near real-time auditing and monitoring controls, seek opportunities to expand access to and the use of\npoint-of-sale information, and improve DIR reporting and auditing to the extent possible. Specifically, we\nnoted the following four findings and recommendations designed to help improve the completeness and\nintegrity of plan sponsor reported data.\n\n1.\t CMS Should Strengthen Controls Over the Bid Review and Audit Process\n Private health insurance companies (plan sponsors) submit bids annually to CMS to participate in the\n Part D program. These bids outline the pricing and benefits for the plans the plan sponsor will offer and\n form the initial basis for determining monthly subsidy payments to the plan sponsor. Subsidy payments\n are estimated amounts paid by CMS to plan sponsors throughout the year and are reconciled after year-\n end with actual drug costs.\n\n The CMS Office of the Actuary (OACT) reviews and audits bids submitted by plan sponsors. OACT\n contracts with actuarial firms to review bids to ensure plan sponsors have followed the Part D Bid\n Guidance and submitted all necessary support. After OACT approves the bids, it chooses a selection of\n plans for audit and requests an actuarial firm to conduct an in-depth review of the actuarial assumptions\n used to calculate the bid.\n\n We performed procedures to determine the design and effectiveness of the controls CMS has in place\n to ensure bids were properly reviewed and we determined that:\n\n \xef\x82\xb7\t Prior to approving bids in 2008, OACT did not review all bids to verify that all required parts\n (subreviews) of the bid were documented as being complete in Health Plan Management System.\n Specifically, we noted that from a sample of 40 bids, 1 bid was approved by OACT even though\n not all of the required subreviews were documented as being complete. Not reviewing all\n subreviews for completeness increases the risk that CMS may approve bids prior to all parts of the\n review process being completed.\n \xef\x82\xb7\t Inaccuracies found by actuaries as part of the bid audits do not subsequently adjust the monthly\n payments that submitting plan sponsors will receive, which are based on the original bid. As a\n result, plan sponsors will continue to receive payments based on bids not prepared in accordance\n\n\n 2 \n\n\x0c with CMS instructions. These payments may only be partially recovered during the reconciliation\n process.\n \xef\x82\xb7\t The actuarial firms performing bid reviews are contractually required to be independent of the plan\n sponsors whose bids they are reviewing; however, CMS does not require the individual actuaries to\n confirm their independence to CMS for each bid review or audit. Lack of independence could\n compromise the objectivity of the review.\n\n2.\t CMS Should Improve Controls Over the Accuracy and Completeness of PDE and True-\n Out-Of-Pocket (TrOOP) Accumulation\n Plan sponsors submit a PDE record to CMS for each prescription that has been filled for a beneficiary\n enrolled in the plan sponsor\xe2\x80\x99s Part D plan. The PDE record contains information that CMS uses to\n reconcile monthly subsidy payments made to plan sponsors with actual program cost data. We\n performed procedures to determine the design and effectiveness of the controls CMS has in place to\n detect inaccurate PDE records and oversee the TrOOP facilitator and data exchanges with other\n agencies. We determined that:\n\n \xef\x82\xb7\t CMS did not have systematic controls to effectively detect errors in PDE record fields that are used\n in the year-end reconciliation and manual controls currently in place to detect inaccurate PDE\n records do not detect all discrepancies. This may result in PDE errors remaining undetected, which\n in turn could result in under- or over-payments to plan sponsors.\n \xef\x82\xb7\t The current Part D benefit infrastructure does not provide CMS access to point-of-sale and plan\n data to determine whether PDE records are valid and claims are adjudicated in accordance with the\n plan design. CMS has developed a PDE outlier analysis program. Although this control has\n identified drug cost reporting issues at plans, it does not operate at a level of precision and scope to\n compensate for the lack of automated controls.\n \xef\x82\xb7\t CMS did not perform active oversight of the TrOOP Facilitator, a third-party contractor retained by\n CMS to facilitate the exchange of TrOOP and secondary coverage information between plan\n sponsors. Secondary coverage impacts TrOOP costs, which in turns impact the coverage amounts\n reported in PDE records.\n \xef\x82\xb7\t CMS did not monitor its data exchange with the Social Security Administration for Supplemental\n Security Incomelow-income eligibility data. The completeness and accuracy of this information is\n important for plan sponsors to submit accurate PDE records.\n\n3.\t CMS Should Strengthen Controls to Ensure Completeness and Accuracy of DIR Data\n Prior to Reconciliation\n In addition to monthly subsidy payments and PDE records, CMS also uses information about DIR in its\n year-end reconciliation of Part D program costs and payments. DIR consists of discounts, rebates, and\n other price concessions on drugs that lower the plan sponsors\xe2\x80\x99 net cost of drugs. Plan sponsors submit\n DIR information quarterly and after year-end. The year-end totals include actual DIR and estimated\n DIR the plan sponsor expects to receive after the reporting date. We performed procedures to\n determine the design and effectiveness of controls CMS had in place to detect inaccurate DIR\n information submitted by plan sponsors, and we determined that:\n\n \xef\x82\xb7\t CMS\xe2\x80\x99s controls to detect inaccurate DIR may not detect all items needing follow-up because the\n thresholds for follow-up are set relatively high. As a result, not all significant potential\n discrepancies may be flagged for follow-up. If DIR is understated, and CMS\xe2\x80\x99s controls fail to\n\n 3 \n\n\x0c detect the understatement, a plan\xe2\x80\x99s risk corridor payment would be overstated and the plan sponsor\n could receive a larger year-end payment from CMS than that which it was entitled to..\n \xef\x82\xb7\t Plan sponsors are also not required to update estimated DIR information submitted to CMS once\n actual amounts are known. Therefore, CMS does not receive final DIR information from plan\n sponsors (or other sources) to accurately reconcile costs and payments prior to reconciliation.\n\n4.\t CMS Should Conduct More Plan Sponsor Audit Procedures Throughout The Benefit\n Year\n The CMS Office of Financial Management (OFM) performs audits of plan sponsors to help ensure that\n plan sponsors correctly administer the Part D benefits and that plan sponsor data reported to CMS is\n complete and accurate. Additionally, CMS Center for Drug and Health Plan Choice (CPC) conducts\n operational audits throughout the benefit year. Those audits focus on plan sponsor procedural\n compliance with selected chapters of the Part D Manual. CPC also performs audits of diagnosis data\n (RADV audits) for Medicare Advantage plans and validates the mathematical accuracy of the RAF\n calculations. We performed procedures to determine the design and effectiveness of CMS\xe2\x80\x99s audit\n activities and determined that:\n\n \xef\x82\xb7\t CMS does not perform audit activities throughout the current benefit year that focus on financial\n data that are key to year-end reconciliation, such as PDE records, DIR reporting and TrOOP\n accumulation. By design, OFM\xe2\x80\x99s audit activities start after year-end reconciliation is complete.\n OFM audits are intended to satisfy MMA audit requirements but are not an effective control to\n timely detect inaccuracies in PDE, TrOOP, and DIR.\n \xef\x82\xb7\t CMS has not formally taken compliance action on audit results in a timely manner. The first\n compliance letters to plan sponsors based on OFM audit results of 2006 data were not sent by\n CPC until September 2009. The delay in formally communicating audit results may delay\n corrective action by plan sponsors to avoid future errors.\n \xef\x82\xb7\t The Medicare Enrollment Database (EDB) extract used by the Risk Adjustment System contractor\n to calculate RAFs and the EDB extract used by the validation contractor to validate the RAF\n calculations are not created at the same time. This results in timing differences between the two\n sets of data making the identification and analysis of discrepancies more difficult.\n\nThe findings and related recommendations are presented in the Results section of this report. Together, the\nrecommendations are designed to help improve the effectiveness of the reconciliation process by CMS, and\nwe encourage timely implementation of recommendations. The Acting Administrator\xe2\x80\x99s written response\ndated March 11, 2010, to our draft report dated December 3, 2009, is included in Appendix C. Overall, the\nresponse was consistent with our understanding of the facts that served as the basis for the updated findings\nand recommendations made within this report. In cases where CMS did not agree with a recommendation,\nwe either revised or provided clarification accordingly. We did not conduct any procedures to verify the\nchanges to processes and controls represented by management.\n\nThis performance audit did not constitute an audit of financial statements in accordance with Government\nAuditing Standards. KPMG LLP (KPMG) was not engaged to, and did not render an opinion on CMS\xe2\x80\x99s\ninternal controls over financial reporting or over financial management systems (for purposes of OMB\xe2\x80\x99s\nCircular No. A-127, Financial Management Systems, July 23, 1993, as revised). KPMG cautions that\nprojecting the results of our evaluation to future periods is subject to the risks that controls may become\ninadequate because of changes in conditions or because compliance with controls may deteriorate.\n\n\n 4 \n\n\x0cWe thank CMS management for their participation in this audit. Their time and participation allowed for a\nconstructive exchange of ideas to improve the Part D Program internal control environment.\n\nSincerely,\n\n\n\n\n 5 \n\n\x0cBACKGROUND\nOn November 15, 2005, Medicare Part D, the prescription drug coverage program for seniors and other eligible\ncitizens, went into effect. Under this program, private health insurance companies and organizations (plan\nsponsors) offer insurance coverage for prescription drugs in which Medicare recipients can enroll. CMS\ncontracted with plan sponsors nationwide to offer these plans and began providing benefits for qualified\nbeneficiaries on January 1, 2006. In addition to offering a basic benefit package as defined by law, most plan\nsponsors offer enhanced plans with additional benefits such as differing copayments and drug coverage. The\nMedicare Part D program differs from other entitlement programs in that it operates on a cost-sharing basis. The\namount the U.S. government contributes to an individual\xe2\x80\x99s prescription drug claim varies depending on the\namount of \xe2\x80\x9ctotal drug spend\xe2\x80\x9d incurred by the plan and \xe2\x80\x9ctotal out-of-pocket cost\xe2\x80\x9d incurred by the beneficiary. The\nplan sponsor collects beneficiary premiums and settles pharmacy and other distribution costs.\n\nTo fulfill the U.S. government\xe2\x80\x99s obligation to the program, CMS makes payments to plan sponsors on a monthly\nbasis through estimated subsidy payments and, where needed, at year-end as a result of the payment\nreconciliation process. The reconciliation process compares estimated subsidy payments made to plan sponsors\nthroughout the year with the cost data submitted by plan sponsors through Prescription Drug Event (PDE)\nrecords and Direct or Indirect Remuneration (DIR) data to determine any residual payments required by CMS to\nplan sponsors or plan sponsors to CMS. The reconciliation process relies on four major data sources: the sum of\npayments made to plan sponsors throughout the year, final updated plan enrollment, PDE records from plan\nsponsors, and DIR. These inputs into the reconciliation process are further discussed in Appendix A.\n\n\nOBJECTIVE, SCOPE, AND METHODOLOGY\nObjectives\nThis performance audit focused on assisting the Office of the Inspector General (OIG) in understanding the\ndesign and effectiveness of CMS\xe2\x80\x99s controls to (1) accurately calculate and track monthly plan payments, (2)\nidentify incomplete and/or inaccurate PDE records received, and (3) determine completeness of PDE records\nprior to reconciliation for the purpose of determining risk-sharing amounts and adjustments to risk corridors.\n\nTo evaluate CMS\xe2\x80\x99s controls over payments to plan sponsors, PDE records, and year-end reconciliation, we\ndeveloped audit procedures to determine whether internal controls provide reasonable assurance that:\n\n\xef\x82\xb7 The inputs that drive the calculation of monthly payments to plan sponsors are accurate and complete\n\xef\x82\xb7 The RAF calculations by the Risk Adjustment Processing System are accurate\n\xef\x82\xb7 Monthly payments are accurately calculated and are tracked\n\xef\x82\xb7 Submitted PDE records are valid, accurate, and complete\n\xef\x82\xb7 PDE data is complete prior to year-end reconciliation\n\xef\x82\xb7 DIR reporting is accurate and complete.\n\nScope\nOur performance audit focused on evaluating controls operated by CMS over the processing of monthly\npayments and controls over the inputs into monthly payments and the year-end reconciliation. Our Washington,\nD.C. office conducted fieldwork at CMS offices in Baltimore, Maryland, during the period from March 10, 2009\n\n 6 \n\n\x0cto October 23, 2009. During this period, we interviewed personnel and examined evidence pertaining to the CMS\ncontrols over monthly payments and inputs to the year-end reconciliation that were in place for the fiscal year\nbeginning October 1, 2008 through September 30, 2009. Our work program included procedures to test CMS\xe2\x80\x99s\ncontrols that were relevant to our performance audit objectives. Our procedures did not extend to controls\noperated by CMS\xe2\x80\x99s contractors (i.e., the TrOOP Facilitator, Palmetto GBA, Acumen LLC), other agencies, or\nstate governments, and were limited to control activities performed by CMS.\n\nMethodology\nTo conduct our assessment, we developed a work program that included steps to address each audit objective.\nWe used the following references, Control Objectives for Information Technology, the CMS Prescription Drug\nBenefits Manual and the Medicare Modernization Act (MMA), to help identify the control requirements and best\npractices and to obtain an understanding of the required reconciliation processes, implemented procedures, and\nrelated controls. The U.S. Department of Health and Human Services OIG reviewed and approved our audit\nprogram prior to the commencement of on-site fieldwork. Our work program was designed to address the\nspecified audit objectives and included procedures to evaluate CMS\xe2\x80\x99s application package review process, data\nanalysis procedures, plan sponsor audit activities, and process for creating and tracking corrective action plans.\nOur approach to conducting these procedures included performing inquiries, making observations and examining\ndocumentation. We used a sampling approach in instances where a test of controls was conducive to sampling.\n\n\nRESULTS\nThis report summarizes our findings resulting from our evaluation of the controls over CMS\xe2\x80\x99s Part D\nReconciliation process. For each of our findings, we provide recommendations for corrective actions by CMS, as\nwell as CMS management\xe2\x80\x99s response to those recommendations.\n\n 1. CMS Should Strengthen Controls Over the Bid Review and Audit Process (OARS 09-01)1\n Conditions\n The CMS Office of the Actuary (OACT) reviews and audits bids submitted by plan sponsors. OACT\n contracts with actuarial firms to review bids to ensure plan sponsors have followed the Part D Bid Guidance\n and submitted all necessary support. After OACT approves the bids, it chooses a selection of plans for audit\n and requests an actuarial firm to conduct an in-depth review of the actuarial assumptions used to calculate the\n bid.\n\n We performed procedures to determine the design and effectiveness of the controls CMS has in place to\n ensure bids were properly reviewed. We determined that:\n\n (i)\t Prior to approving bids in 2008, OACT did not review all bids to verify that all required parts\n (subreviews) of the bid were documented as being complete in Health Plan Management System\n (HPMS). Specifically, we noted that from a sample of 40 bids, one bid was approved by OACT even\n though not all of the required subreviews were documented as being complete.\n (ii)\t Inaccuracies found by actuaries as part of the bid audits do not subsequently adjust the monthly\n payments that submitting plan sponsors will receive, which are based on the original bid.\n\n\n1\n We have referenced our findings with a sequential Objective Attribute Recap Sheet (OARS) number in the format \xe2\x80\x9cOARS\nYY-nn\xe2\x80\x9d where \xe2\x80\x9cYY\xe2\x80\x9d is fiscal year and \xe2\x80\x9cnn\xe2\x80\x9d is a sequential number.\n 7 \n\n\x0c(iii)\t The actuarial firms performing bid reviews are contractually required to be independent of the plan\n sponsors whose bids they are reviewing; however, CMS does not require the individual actuaries to\n confirm their independence to CMS for each bid review or audit.\n\nCauses\n(i)\t Due to a large number of bids in 2008, OACT did not have the resources to review every plan\xe2\x80\x99s bid to\n ensure that all required bid subreviews were complete prior to approving a plan\xe2\x80\x99s bid. OACT\n management informed us that for calendar year 2008, they performed such a review only for a\n selection of bids and that starting in calendar year 2009, OACT would start to review all bids to verify\n that all required bid subreviews were documented as being complete.\n(ii)\t Due to the statutory framework and complexities of the MMA Part D program, CMS is limited in its\n ability to affect changes to approved bids based on the results of a bid audits The MMA requires that\n prospective payments to plans and beneficiary premiums both be calculated using a prescribed formula\n based on a plan\xe2\x80\x99s approved bid amount, the national average monthly bid amount, and the Part D base\n beneficiary premium. Therefore, making retroactive changes to prospective payment amounts would\n affect bid amounts and beneficiary premiums not only for the affected plan, but could also affect the\n regional benchmarks or the national average bid amount and could ultimately create an uneven\n competitive market for plans since not all plans are subject to audit each year.\n(iii)\t OACT does not require actuarial firms to certify the independence of the individual actuaries working\n on bid reviews or bid audits.\n\nCriteria\nFor conditions (i) and (iii):\n 42 CFR Part 423.272 states: (1) Application of revenue requirements standard. CMS approves a bid\n submitted under \xc2\xa7423.265 only if it determines that the portions of the bid attributable to basic and\n supplemental prescription drug coverage are supported by the actuarial bases provided and reasonably\n and equitably reflect the revenue requirements (as used for purposes of section 1302(8)(C) of the\n Public Health Service Act) for benefits provided under that plan, less the sum (determined on a\n monthly per capita basis) of the actuarial value of the reinsurance payments under section \xc2\xa7423.329(c).\nFor condition (ii):\n 42 CFR Part \xc2\xa7423.346 establishes requirements for reopening reconciliation including errors, fraud, or\n a good cause for reopening reconciliation as it states: (a) CMS may reopen and revise an initial or\n reconsidered final payment determination (including a determination on the final amount of direct\n subsidy described in \xc2\xa7423.329(a)(1), final reinsurance payments described in \xc2\xa7423.329(c), the final\n amount of the low-income subsidy described in \xc2\xa7423.329(d), or final risk corridor payments as\n described in \xc2\xa7423.336)\xe2\x80\x94(1) For any reason, within 12 months from the date of the notice of the final\n determination to the Part D sponsor; (2) After that 12-month period, but within 4 years after the date of\n the notice of the initial or reconsidered determination to the Part D sponsor, upon establishment of\n good cause for reopening; or (3) At any time, in instances of fraud or similar fault of the Part D\n sponsor or any subcontractor of the Part D sponsor. (b) For purposes of this section, CMS will find\n good cause if\xe2\x80\x94(1) New and material evidence that was not readily available at the time the final\n determination was made is furnished; (2) A clerical error in the computation of payments was made; or\n (3) The evidence that was considered in making the determination clearly shows on its face that an\n error was made. (c) For purposes of this section, CMS will not find good cause if the only reason for\n reopening is a change of legal interpretation or administrative ruling upon which the final\n determination was made.\n\n 8 \n\n\x0c Effects\n (i)\t If OACT does not verify that all review steps have been completed prior to approving bids, the risk is\n increased that bids may be approved without being subject to all the required subreviews. This may\n result in bids with errors being accepted.\n (ii)\t When results of bid audits have no impact on monthly payments or year-end reconciliation, plan\n sponsors may benefit from an overbid by retaining a portion of the excess payments to them through\n risk sharing with CMS at year-end reconciliation.\n (iii)\t If individual actuaries are not independent of the plan sponsor when conducting bid reviews and bid\n audits, actuaries may have an actual or perceived bias when reviewing and auditing bids.\n\n Recommendations\n We recommend that:\n\n (i)\t Prior to approving the bid, CMS continues to ensure that the bid reviews and subreviews are\n documented as complete and that the review results support the recommendation to approve the bid.\n CMS should consider implementing automated checks in its data collection system(s) to aid in\n ensuring each required bid subreview is recorded as complete prior to allowing CMS to document\n approval of the bid.\n (ii)\t OACT works with Center for Drug and Health Plan Choice (CPC), Office of Financial Management\n (OFM), and OIG to correlate results from bid audits with other oversight activity outcomes (e.g.,\n outlier analysis, operation audits, and OFM audits) to help ensure bid audit results (contract-specific or\n in aggregate) are considered in ongoing compliance monitoring of plan sponsors and year-end\n reconciliation.\n (iii)\t CMS requires individual actuaries to certify their independence of the plan sponsor prior to performing\n bid reviews or bid audits.\n\n Management Response\n CMS concurred with some recommendations and did not concur with others. CMS partially concurred with\n recommendations (i) and (ii) and concurred with recommendation (iii). CMS did not concur with our\n recommendations for including automated edits in HPMS and reviewing its options to recover payments as a\n result of bid audits.\n\n Auditor\xe2\x80\x99s Comments\n\n In response to CMS\xe2\x80\x99s comments, we revised the wording of recommendations (i) and (ii). We also removed\n one recommendation that CMS did not concur with and agreed with CMS\xe2\x80\x99s position on this matter as stated\n on page 5 of CMS\xe2\x80\x99s response, attached as Appendix C.\n\n2.\t CMS Should Improve Controls Over the Accuracy and Completeness of PDE and True-Out-\n Of-Pocket (TrOOP) Accumulation (OARS 09-02)\n Conditions\n Plan sponsors submit a PDE record to CMS for each prescription that has been filled for a beneficiary\n enrolled in the plan sponsor\xe2\x80\x99s Part D plan. The PDE record contains information that CMS uses to reconcile\n monthly subsidy payments made to plan sponsors with actual program cost data. We performed procedures\n\n\n 9 \n\n\x0c to determine the design and effectiveness of the controls CMS has in place to detect inaccurate PDE records\n and provide oversight of the TrOOP facilitator and data exchanges with other agencies. We determined that:\n\n (i)\t CMS did not have systematic controls to effectively detect errors in the calculation of PDE payment and\n cost fields2 that are used in the year-end reconciliation. In addition, CMS does not have automated\n controls in place to detect instances where plans may be failing to maintain accurate TrOOP and Drug\n Spend balances.\n (ii)\t The current Part D benefit infrastructure does not provide CMS access to point-of-sale and plan data to\n determine whether PDE records are valid and claims are adjudicated in accordance with the plan design.\n CMS has developed a PDE outlier analysis program. Although this control has identified drug cost\n reporting issues at plans, it does not operate at a level of precision and scope to compensate for the lack\n of automated controls.\n (iii) CMS did not perform active oversight of the TrOOP Facilitator, a third-party contractor retained by\n CMS to facilitate the exchange of TrOOP and secondary coverage information between plan sponsors.\n Specifically, CMS\xe2\x80\x99s oversight of the TrOOP Facilitator was not suitably designed to help ensure that\n secondary payment reporting (N1) and account transfer (FIR) transactions sent to the plans were as\n complete and accurate as possible. CMS\xe2\x80\x99s oversight activities of the TrOOP Facilitator were limited to\n weekly status meetings to discuss TrOOP Balance Transfer Reports that summarized, by plan sponsor,\n total counts of accepted and rejected FIR transaction responses. These reports did not provide CMS\n visibility into the completeness of FIR transactions or the effectiveness of the N1 process.\n (iv) CMS did not monitor its data exchange with the Social Security Administration (SSA) for Supplemental\n Security Income (SSI) low-income eligibility data to detect any errors that need to be resolved.\n\n Causes\n (i)\t CMS\xe2\x80\x99s cost edits reviewed in the Drug Data Processing System (DDPS) are designed to detect PDEs\n with costs and payments that do not balance or that have zero cost. CMS has not implemented additional\n cost edits to detect the miscalculation of cost fields such as Covered D Plan Paid (CPP) Amount, Gross\n Drug Cost Below the Out-of-Pocket Threshold (GDCB), and Gross Drug Cost Above the Out-of-Pocket\n Threshold (GDCA) because such edits are technically difficult to implement due to the high volume of\n transactions. Such edits would require DDPS to have access to year-to-date balances for accumulated\n drug cost and accumulated TrOOP for each PDE record being processed as of the point-in-time that the\n underlying claim was adjudicated. CMS\xe2\x80\x99s lack of access to accumulated drug cost and TrOOP balances\n for each PDE record received also contributes to CMS\xe2\x80\x99s inability to determine whether PDE records are\n accurately calculated.\n (ii) Due to a lack of resources and the technical difficulty of developing and implementing a system to\n capture point-of-sale events, CMS lacks insight into point-of-sale events, and therefore does not have\n the necessary data to assess the accuracy, completeness, and validity of PDE data received from plan\n sponsors.\n (iii) CMS does not exercise effective oversight of the TrOOP Facilitator due to a lack of resources and due to\n known issues that prevent the TrOOP Facilitator from generating a complete stream of N1 transactions.\n Some of these issues arise because insurance companies are not required by law to share with CMS data\n on their Medicare supplemental prescription drug insurance enrollees and beneficiaries may not always\n indicate secondary coverage through annual coordination of benefits surveys. Insurance companies that\n\n\n2\n Relevant cost fields include: CPP - Covered D Plan Paid Amount; GDCA - Gross Drug Cost Below the Out-of-Pocket\nThreshold, and GDCA - Gross Drug Cost Above the Out-of-Pocket Threshold.\n 10\n\n\x0c choose to share data with CMS\xe2\x80\x99s TrOOP Facilitator on their Medicare supplemental prescription drug\n insurance enrollees do so through voluntary data sharing agreements with CMS. For those non-Part D\n insurance companies that choose not to share their enrollment data with CMS, the TrOOP Facilitator is\n unable to positively identify B transactions as secondary payments on a Part D claim and consequently\n cannot generate N1 transactions. Therefore, the flow of N1 transactions from the TrOOP Facilitator to\n the plan sponsors may be incomplete.\n(iv) CMS does not monitor the weekly uploads from the SSA of data on SSI recipients to detect any errors\n that need to be resolved because the SSI eligibility data uploads experience a high incidence of rejected\n records (accounting for approximately 80 percent of total record volume) that do not need to be resolved\n and a low incidence of errors that would require manual intervention and correction. The high error\n volume occurs because SSA provides CMS upload files of all SSI recipients that have not been deemed\n for low-income subsidy (LIS), regardless of whether the beneficiaries are Medicare eligible. SSA has\n scheduled changes to its interface with CMS to be made in 2010.\n\nCriteria\nFor conditions (i) and (ii):\n\n 42 CFR Part 423.503 states: (d) Oversight of continuing compliance. (1) CMS oversees a Part D plan\n sponsor\xe2\x80\x99s continued compliance with the requirements for a Part D plan sponsor.\n\nFor conditions (i), (ii), (iii), and (iv):\n\n Section 2 of the Federal Managers Financial Integrity Act of 1982 states: \xe2\x80\xa6 internal accounting and\n administrative controls of each executive agency shall be established in accordance with standards\n prescribed by the Comptroller General, and shall provide reasonable assurances that:\n\n (i) \t Obligations and costs are in compliance with applicable law\n (ii) \t Funds, property, and other assets are safeguarded against waste, loss, unauthorized use, or\n misappropriation\n (iii) \t Revenues and expenditures applicable to agency operations are properly recorded and \n\n accounted for to permit the preparation of accounts and reliable financial and statistical \n\n reports and to maintain accountability over the assets \n\n\nFor conditions (i) and (iii): 42 CFR Part 423.104 states: coverage limit is equal to:\n\n (i) \t For 2006. $2,250\n (ii) \t For years subsequent to 2006. The amount specified in this paragraph for the previous\n year, increased by the annual percentage increase specified in paragraph (d)(5)(iv) of this\n section, and rounded to the nearest multiple of $10\n (iii) \t Cost-sharing between the initial coverage limit and the annual out-of-pocket threshold\n Coinsurance for costs for covered Part D drugs above the initial coverage limit described\n in paragraph (d)(3) of this section and annual out-of-pocket threshold described in\n paragraph (d)(5)(iii) of this section that is equal to 100 percent of actual costs\n (iv) \t Protection against high out-of-pocket expenditures. (i) After an enrollee\xe2\x80\x99s incurred costs\n exceed the annual out-of-pocket threshold described in paragraph (d)(5)(iii) of this\n section, cost sharing equal to the greater of:\n (A) \t Copayments. (1) In 2006, $2 for a generic drug or preferred drug that is a multiple source\n drug (as defined in section 1927(k)(7)(A)(i) of the Act) and $5 for any other drug; and (2)\n For subsequent years, the copayment amounts specified in this paragraph for the previous\n\n 11\n\n\x0c year increased by the annual percentage increase described in paragraph (d)(5)(iv) of this\n section and rounded to the nearest multiple of 5 cents\n (B) Coinsurance. Coinsurance of 5 percent of actual cost.\n\nEffects\n(i)\t If the CPP amount on a plan\xe2\x80\x99s PDE records is miscalculated, the amount of payment due to or from the\n plan at year-end reconciliation may be inaccurate. For example, if CPP is overstated, risk corridor costs\n will also be overstated, which may cause the plan to receive a year-end reconciliation payment from\n CMS that is too high. If GDCA and GDCB on a plan\xe2\x80\x99s PDE records are miscalculated, the amount of\n payment due to or from the plan at year-end reconciliation may be inaccurate. For example, if GDCA is\n overstated, at year-end reconciliation the plan may receive a Reinsurance Subsidy payment from CMS\n that is too high. If GDCB is overstated, then DIR would be underallocated to GDCA, causing GDCA net\n of DIR to be overstated, which may cause the Reinsurance Subsidy payment at year-end reconciliation to\n be too high. In addition, by not operating controls to detect instances where plans may be failing to\n maintain accurate TrOOP and Drug Spend balances, CMS may not detect instances where plans are\n adjudicating claims inaccurately and submitting inaccurate PDE records.\n(ii) Outside of plan audits or any ad hoc requests for data to plan sponsors, CMS is dependent on plan\n sponsors to provide accurate and valid PDE data. CMS\xe2\x80\x99s lack of access to the necessary data to\n independently determine if PDE records are accurately calculated diminishes the effectiveness of CMS\xe2\x80\x99s\n oversight of the accuracy of plan sponsors\xe2\x80\x99 calculation of PDE records and of the underlying claims.\n(iii) Without complete information of supplemental insurance coverage, insight into point-of-sale events, and\n a program for overseeing the TrOOP Facilitator, TrOOP amounts accumulated by plan sponsors may be\n inaccurate, which in turn would affect the accuracy of plan-sponsor-reported PDE records.\n(iv) By not monitoring the weekly uploads from SSA of SSI eligibility data to detect any errors that need to\n be resolved, any errors that do require manual intervention and correction may not be resolved and the\n claims of LIS-eligible SSI recipients may not be adjudicated using LICS rules, resulting in inaccurately\n calculated claims and PDE records for the affected beneficiaries.\n\nRecommendations\nWe recommend that:\n\n(i) CMS develops and implements system-based edits to prevent and detect errors in the calculation of PDE\n payment and cost fields that are used in the year-end reconciliation, such as CPP, GDCB, and GDCA.\n We acknowledge the technical difficulty of implementing such edits, especially in real-time. Therefore,\n we recommend that to incrementally improve controls over the calculation of PDE fields that are key to\n the year-end reconciliation, CMS should consider the following interim steps:\n - Adding fields to the PDE record layout for plans to report drug spend and TrOOP accumulator\n balances on every PDE record, and thereby using plan-sponsor-reported accumulator balances as the\n basis for detective cost and payment field edits (i.e., CPP, GDCB, and GDCA)\n - Developing, outside of the DDPS, an analysis mechanism to detect inaccurate payment and cost\n fields for a subset of PDE records based on CMS\xe2\x80\x99s recalculation of CPP, GDCB, and GDCA fields\n and independent accumulation of TrOOP and Drug Spend balances. As CMS refines the operation of\n such a detective control, it could then incrementally increase the volume of PDE records recalculated\n and ultimately implement real-time preventative payment and cost field edits.\n(ii) CMS studies the feasibility of obtaining and using point-of-sale data in the determination of monthly\n payments, to conduct near real-time validation of PDE records, and to anticipate year-end program costs.\n\n 12\n\n\x0c We recommend that the study focus on the technical and programmatic aspects of real-time point-of-sale\n data collection and determine the opportunities, limitations, and cost-benefits of enhancing automated\n controls over PDE record validation while considering current, mostly ad hoc, data validation processes.\n The study should consider the current Part D program design and propose near- and longer-term\n solutions to help optimize Part D program real-time monitoring controls in a cost-effective manner.\n (iii) CMS implements a formal oversight program of the TrOOP Facilitator and continues to work with\n insurers to encourage the sharing of enrollee information and considers obtaining additional point-of-sale\n transaction information to allow comparison of the plan sponsor and pharmacy-reported information and\n to anticipate the number of outstanding PDE records.\n (iv) CMS implements a control to monitor the weekly uploads from the SSA of SSI eligibility data to detect\n and correct any errors that require manual intervention to be resolved.\n\n Management Response\n CMS concurred with recommendations (i), (ii), and (iv). With respect to recommendation (iii), CMS notes\n that unless other insurers supplemental to Medicare establish unique identifiers for each separate plan they\n offer, claims that are supplemental to Part D cannot be distinguished from all others. As a result, the TrOOP\n Facilitator\xe2\x80\x99s receipt of other payer claims information will not translate into the creation of additional Nx\n transactions, specifically if the additional claims cannot be matched with Part D beneficiaries. Until process\n improvements are in place, CMS does not agree that Nx transactions should be compared to reported PDE or\n used for estimating the number of PDEs. CMS will continue to encourage other payers to establish and use\n unique identifiers.\n\n Auditor\xe2\x80\x99s Comments\n\n We agree with CMS\xe2\x80\x99 commentary on recommendation (iii) and encourage CMS to lead process\n improvement efforts.\n\n3.\t CMS Should Strengthen Controls to Ensure Completeness and Accuracy of DIR Prior to\n Reconciliation (OARS 09-03)\n Conditions\n In addition to monthly subsidy payments and PDE records, CMS also uses information about DIR in its year-\n end reconciliation of Part D program costs and payments. DIR consists of discounts, rebates, and other price\n concessions on drugs that lower the plan sponsors\xe2\x80\x99 net cost of drugs. Plan sponsors submit DIR information\n quarterly and after year-end. The year-end totals include actual DIR and estimated DIR the plan sponsor\n expects to receive after the reporting date. We performed procedures to determine the design and\n effectiveness of controls CMS had in place to detect inaccurate DIR information submitted by plan sponsors\n and we determined that:\n\n (i)\t CMS\xe2\x80\x99s controls to detect inaccurate DIR may not detect all items needing follow-up because the\n thresholds for follow-up are set relatively high. For example, CMS\xe2\x80\x99s DIR checks for 2007 included\n comparing a plan\xe2\x80\x99s reported DIR as a percent of total drug costs to a plan\xe2\x80\x99s prior year DIR reporting.\n In another DIR check, CMS flags reported DIR of less than 2 percent or greater than 50 percent of\n gross drug costs as outlier DIR reports needing follow-up. As a result, not all significant potential\n discrepancies may be flagged for follow-up.\n (ii)\t Plan sponsors are also not required to update estimated DIR information submitted to CMS once actual\n amounts are known. Therefore, CMS does not receive final DIR information from plan sponsors (or\n other sources) to accurately reconcile costs and payments prior to reconciliation.\n 13\n\n\x0cCauses\n(i)\t CMS is limited to a three-week period each year between the annual plan sponsor DIR reporting\n deadline and end-of-year reconciliation to review and accept plan sponsors\xe2\x80\x99 annual DIR reports. The\n limited time available to review plan sponsors\xe2\x80\x99 DIR reports limits the rigor of CMS\xe2\x80\x99s review of DIR\n reports. Also, generally actual DIR is not known by plan sponsors until after year-end reconciliation\n and consequently plan sponsors report estimated DIR to CMS. In addition, CMS does not receive\n regular confirmation from Pharmacy Benefit Managers (PBMs) and manufacturers on DIR data\n reported by plans. Since each plan has the ability to negotiate its own rebates and discounts with\n manufacturers and PBMs, it may be difficult to identify reporting issues without information from\n PBMs and manufacturers. In addition, PBMs and manufacturers may not have full visibility into how\n rebates and discounts are allocated for each plan and individual drug rebate information is considered\n proprietary information.\n(ii)\t CMS policies do not require submission of final DIR information.\n\nCriteria\n42 CFR Part 423.308 states: For the purposes of this subpart, the following definitions apply: Actually paid\nmeans that the costs must be actually incurred by the Part D sponsor and must be net of any direct or indirect\nremuneration (including discounts, chargebacks or rebates, cash discounts, free goods contingent on a\npurchase agreement, up-front payments, coupons, goods in kind, free or reduced-price services, grants, or\nother price concessions or similar benefits offered to some or all purchasers) from any source (including\nmanufacturers, pharmacies, enrollees, or any other person) that would serve to decrease the costs incurred by\nthe Part D sponsor for the drug.\n\nEffects\nIn performing the year-end reconciliation, CMS calculates a plan\xe2\x80\x99s risk corridor payment by subtracting any\nDIR received. If DIR is understated, and CMS\xe2\x80\x99s controls fail to detect the understatement, a plan\xe2\x80\x99s risk\ncorridor payment would be overstated and the plan sponsor could receive a larger year-end payment from\nCMS than to which it was entitled.\n\nRecommendations\nWe recommend that:\n\n(i)\t CMS applies more narrow thresholds and continues to refine its benchmarks and metrics for its DIR\n analysis. CMS should also consider including DIR metrics at the individual drug level and perform\n comparisons between plans at the drug level. Due to the nature of DIR reporting, CMS may be limited\n in drawing direct conclusions from DIR analysis; however, the results could be used by CMS as a risk\n factor in selecting plans for audit or other oversight activities. CMS should, where needed, coordinate\n and work with the OIG to align DIR oversight activities and further explore ways to incorporate PBM\n records in OIG or CMS oversight activities. CMS should obtain clarification from its Office of General\n Counsel to determine its authority to require PBMs to submit rebate data to CMS and for CMS to\n collect drug rebate data at the individual drug level to execute its responsibilities for DIR under the\n MMA.\n(ii)\t CMS requires plan sponsors to \xe2\x80\x9ctrue-up\xe2\x80\x9d reported annual estimated DIR amounts with actual amounts\n by plan and drug to allow a better basis for trending subsequent quarterly and annual submissions.\n\n\n\n\n 14\n\n\x0c Management Response\n CMS concurred with some recommendations and did not concur with others. CMS partially concurred with\n recommendation (i) and (ii). CMS did not concur with our recommendation to use DIR information obtained\n directly from PBMs to validate DIR reports submitted by plan sponsors since many plan sponsors rely on\n PBMs to prepare this information and because CMS\xe2\x80\x99s authority to request this information is unknown. CMS\n also noted that it may not be able to ensure access to PBM records.\n\n Auditor\xe2\x80\x99s Comments\n\n In response to CMS\xe2\x80\x99s comments, we revised the wording of recommendations (i) and (ii). We encourage\n CMS to obtain clarification on its authority with respect to PBMs since information obtained from a third\n party could provide an important source of corroboration.\n\n4.\t CMS Should Conduct More Plan Sponsor Audit Procedures Throughout the Benefit Year\n (OARS 09-04)\n Conditions\n The CMS OFM performs audits of plan sponsors to help ensure that plan sponsors correctly administer the\n Part D benefits and that plan sponsor reported data to CMS is complete and accurate. Additionally, CMS\n CPC conducts operational audits throughout the benefit year. Those audits focus on plan sponsor procedural\n compliance with selected chapters of the Part D Manual. CPC also performs Risk Adjustment Data\n Validation (RADV) audits for Medicare Advantage plans and validates the mathematical accuracy of the\n RAF calculations. We performed procedures to determine the design and effectiveness of CMS\xe2\x80\x99s audit\n activities and determined that:\n\n (i) CMS does not perform audit activities throughout the current benefit year that focus on financial data\n that is key to year-end reconciliation, such as PDE records, DIR reporting and TrOOP accumulation. By\n design, OFM\xe2\x80\x99s audit activities start after year-end reconciliation is complete. OFM audits are intended to\n satisfy MMA audit requirements but are not an effective control to timely detect inaccuracies in PDE,\n TrOOP and DIR.\n (ii) CMS has not formally taken compliance action on audit results in a timely manner. The first compliance\n letters to plan sponsors based on OFM audit results of 2006 data were not sent out by CPC until\n September 2009. OFM informs CPC of audit progress and results. CPC is responsible for taking\n compliance action where needed. For 2006, 229 organizations had a total of 495 Part D contracts with\n CMS. For 2007, 255 organizations had a total of 572 Part D contracts with CMS. As of October 14,\n 2009, CMS had completed 100 out of 169 planned contract audits for 2006 and 19 out of 200 planned\n contract contracts for 2007. Audits for the 2008 plan year had not yet been started. In addition, CMS has\n sought ways to be more efficient and has reduced audit coverage for efficiency by auditing 86 of the\n same contracts for 2006 and 2007.\n (iii) The Medicare Enrollment\t Database (EDB) extract used by the Risk Adjustment System (RAS)\n contractor to calculate RAFs and the EDB extract used by the validation contractor to validate the RAF\n calculations are not created at the same time. This results in timing differences between the two sets of\n data making the identification and analysis of discrepancies more difficult.\n\n Causes\n (i)\t Although CMS performs a number of plan sponsor oversight activities, to reduce overlapping\n responsibilities only OFM conducts audits that validate cost data submitted by plan sponsors. These\n audits are designed to meet legislative requirements and are performed after year-end reconciliation.\n 15\n\n\x0c(ii)\t The MMA requires CMS to conduct audits of one-third of Part D plan sponsors every year. However,\n the need to set up an audit infrastructure program, delayed start to performing audits, the time-\n intensive audit reporting process, and funding constraints have collectively challenged CMS\xe2\x80\x99s ability\n to perform the necessary audits and take corrective action in a timely manner.\n(iii)\t The EDB database extract is not pulled at the same time for the calculation of the RAF and the\n validation of the RAF because CMS deems the timing differences between the data extracts to be\n inconsequential.\n\nCriteria\n(i)\t 42 CFR Part \xc2\xa7423.504 states the requirements for one-third audits of plan sponsors: (d) Protection\n against fraud and beneficiary protections. (1) CMS annually audits the financial records (including but\n not limited to, data relating to Medicare utilization and costs, including allowable reinsurance and risk\n corridor costs as well as low-income subsidies and other costs) under this part of at least one-third of\n the Part D sponsors offering Part D drug plans.\n(ii)\t 42 CFR \xc2\xa7423.104 establishes that periodic audits may be conducted: (4) Audits. CMS and the Office\n of the Inspector General may conduct periodic audits of the financial statements and all records of Part\n D sponsors pertaining to any qualified prescription drug coverage they may offer under a Part D plan.\n(iii)\t 42 CFR \xc2\xa7423.329 requires that CMS establish an appropriate methodology for adjusting the\n standardized bid amount to take into account variation in costs for basic prescription drug coverage\n among Part D plans based on the differences in actuarial risk of different enrollees being served. Any\n risk adjustment is designed in a manner so as to be budget neutral in the aggregate to the risk of the\n Part D eligible individuals who enroll in Part D plans.\n\nEffects\n(i)\t Because CMS completes audits of plan sponsors long after the end of a plan year and the year-end\n reconciliation, audit results do not impact the year-end reconciliation or payments to plans.\n Additionally, CMS is unable to provide timely oversight and communications with plans to help\n ensure compliance with CMS requirements. The timing lag on the benefit year (BY) 2006 and BY\n 2007 audits is continuing to affect the timeliness of the one-third audits, as BY 2008 audits have not\n yet been started.\n(ii)\t The delay in formally communicating audit results may delay corrective action by plan sponsor to\n avoid future errors.\n(iii)\t By not creating the EDB extract at the same time for both the RAF calculations and the RAF\n validation, CMS is reducing the precision of the RAF validation and is making it less likely that CMS\n will be able to determine if smaller differences between the RAFs calculated by the RAS contractor\n and the recalculated RAFs represent calculation errors or are due to timing differences in the data.\n Therefore, the current validation process could fail to detect calculation errors that could impact\n payments to plan sponsors.\n\n\n\n\n 16\n\n\x0c Recommendations\n We recommend that:\n\n (i)\t CPC, OFM, and OACT jointly enhance the Part D assurance and compliance program. The program\n can consist of CMS audits and independently audited assertions provided by plan sponsors such as\n SAS 70 examinations. The CMS Part D assurance program should:\n - Fully fund CMS\xe2\x80\x99s obligations under the Medicare Modernization Act to conduct timely audits of\n one-third of Part D plan sponsors annually\n - Include continuous audit procedures designed to provide relevant results prior to year-end\n reconciliation including sampling of claims to support PDE records and TrOOP balances\n - Include audit procedures designed to allow results to be extrapolated to identify the financial\n impact of findings on the Part D program and year-end reconciliation\n - Use CMS\xe2\x80\x99s statutory authority to audit plans to design tests of controls over systems and processes\n operated by service organizations (i.e., pharmacy benefit managers, claims processors, and\n enrollment service providers) that allow results to be leveraged across plan sponsors to reduce\n duplicative procedures and effectively deploy audit resources.\n (ii)\t CMS structure audits in a way to allow audit findings for discreet areas to be finalized more quickly\n and compliance action to be taken more promptly.\n (iii)\t CMS create the EDB extract at the same time for both the RAF calculation and the RAF validation, so\n timing differences in the data can no longer be used to explain smaller differences between the RAFs\n calculated by the RAS contractor and the RAFs recalculated by the validation contractor.\n\n Management Response\n CMS concurred with some recommendations and did not concur with others. CMS concurred with\n recommendations (i) and (ii). CMS did not concur with our recommendation for reinstating RADV audits for\n Part D Medicare Advantage. CMS also disagreed with recommendation (iii) to create an extract of the\n Medicare Enrollment Database at the same time for both the RAF calculation and the RAF validation to\n avoid discrepancies due to timing differences.\n\n Auditor\xe2\x80\x99s Comments\n\n In response to CMS\xe2\x80\x99s comments, we removed one recommendation that CMS did not concur with and agree\n with CMS\xe2\x80\x99s position on this matter as stated on page 10 of CMS\xe2\x80\x99s response, attached as Appendix C. We do\n not agree with CMS\xe2\x80\x99s response to recommendation (iii). We are not recommending additional audit\n procedures over the validation process. We also understand that despite the fact that the extracts are pulled at\n different times, the variance is inconsequential. We still recommend, however, that the production and\n validation contractors receive the same EDB extract so that discrepancies attributed to a difference in the\n point of time that the two extracts were run can be eliminated.\n\n\nCONCLUSION\nBased on our procedures, we noted that CMS has designed a layered compliance framework that uses as inputs\nbeneficiary reported complaints, internal data analysis results, audits, and other continuous oversight activities to\ntake compliance action against plan sponsors where needed. In addition, we understand that the current Part D\nprogram design disadvantages CMS from an internal control perspective as critical data needed for year-end\n 17\n\n\x0creconciliation, including PDE records and DIR information, is self-reported by plan sponsors. In addition, CMS\nis limited in its ability to react to plan sponsor bid audit results due to the program\xe2\x80\x99s complexity and statutory\nframework. Furthermore, while CMS performs statutorily mandated audits of one-third of plan sponsors for each\nyear, these reviews do not provide for timely assessment of the accuracy and validity of plan sponsor reported\ninformation. CMS should do more to close the inherent internal control disparity that exists in the program. As\nsuch, we encourage CMS to implement more near-real-time auditing and monitoring controls, seek opportunities\nto expand access to and the use of point-of-sale information, and improve DIR reporting and auditing to the\nextent possible.\n\n\n\n\n 18\n\n\x0cAPPENDIX A \xe2\x80\x93 PROCESS FLOW DESCRIPTION\nTo fulfill the U.S. government\xe2\x80\x99s obligation to the Part D program, CMS makes payments to private health\ninsurance companies (plan sponsors) on a monthly basis through estimated subsidy payments and, where needed,\nat year-end as a result of the payment reconciliation process. Plan sponsors submit bids annually to CMS to\nparticipate in the Part D program. These bids outline the pricing and benefits for the plans the plan sponsor will\noffer and form the initial basis for determining monthly subsidy payments to the plan sponsor. The reconciliation\nprocess compares subsidy payments made to plan sponsors throughout the year with the cost data submitted by\nplan sponsors through PDE records and DIR reporting to determine any residual payments required by CMS to\nplan sponsors or plan sponsors to CMS. The reconciliation process relies on four major data sources: the sum of\npayments made to plan sponsors throughout the year, final updated plan enrollment, PDE records from plan\nsponsors and DIR reporting. These inputs into the reconciliation process are further discussed in the sections\nbelow.\n\nPayments to Plan Sponsors\nUsing detailed beneficiary information submitted by plan sponsors with enrollment data and regional information\nabout health care costs, CMS calculates estimated or predictive costs on a monthly basis. These monthly\npayments include a direct subsidy, a LIS and a reinsurance subsidy. After year-end reconciliation, CMS makes,\nwhere needed, a risk corridor payment. All three monthly payment types are calculated at the beneficiary level\nand aggregated to the plan level. These payment types are described in the following paragraphs.\n\nDirect Subsidy \xe2\x80\x93 A plan sponsor\xe2\x80\x99s direct subsidy payment is calculated per enrolled member by multiplying the\nplan sponsor\xe2\x80\x99s standardized bid amount by the member\xe2\x80\x99s RAF. The standardized bid amount equals the total\ncovered drug cost multiplied by the percentage of defined standard benefit. The bid process is further explained\nin the Plan Sponsor Bids section below. The purpose of the RAF is to pay plan sponsors accurately by adjusting\npayments based on the expected prescription drug expenditures of their Medicare-enrolled population based on\ndemographics and health status of that population. RAFs are calculated three times per coverage year for each\nenrollee. The first calculation is performed in the fourth quarter of the previous calendar year. A mid-year\nadjustment is calculated three months into the payment year using updated enrollment and diagnosis data. Based\non the recalculated RAFs, adjustments are made to direct subsidy payments both prospectively and retroactively\n(back to January). The final RAFs are calculated four months after year-end using final enrollment data and are\napplied in July/August of that year. See the section Risk Adjustment Factor for more detail on how the RAFs are\ncalculated.\n\nLow-Income Cost-Sharing Subsidy (LICS) \xe2\x80\x93 The LICS payment is paid to the plan sponsor per qualifying\nenrollee based on the beneficiary\xe2\x80\x99s income and asset levels. LICS payments are made to plan sponsors to cover\nthe prospective LICS provided to qualified members at the point of sale. On a monthly basis, LICS payments are\ndetermined using an estimated cost per qualifying LIS enrollee. Estimated costs are determined using Medicare\nBeneficiary Database codes per LIS enrollee to determine the approximate amount of LIS Beneficiary Cost\nSharing. The MMA deems the following categories of Medicare-eligible beneficiaries to be eligible for the LIS:\n\n\xef\x82\xb7 Beneficiaries who are enrolled in Medicaid\n\xef\x82\xb7 Beneficiaries who are deemed LIS eligible by SSA and are issued an Award letter by SSA\n\xef\x82\xb7 Beneficiaries who receive SSI payments from SSA.\n\nFor each of the above categories of beneficiaries, there is a corresponding stream of data uploads that come from\nState Medicare agencies or from the SSA to CMS systems. For Medicare-eligible beneficiaries who are enrolled\n\n 19\n\n\x0cin Medicaid (i.e., \xe2\x80\x9cdual eligibles\xe2\x80\x9d), CMS receives at least monthly Medicaid enrollment status uploads for the\nentire dual-eligible population from the States. For Medicare-eligible beneficiaries deemed LIS eligible by SSA\nor who receive SSI payments, CMS receives daily and weekly uploads of LIS award transactions or SSI recipient\nrecords from the SSA.\n\nReinsurance Subsidy \xe2\x80\x93 The purpose of the third payment type, Reinsurance Subsidy, is to reduce the risk for\nplan sponsors participating in Part D by guaranteeing them a certain amount of payment for beneficiaries with\nhigh drug costs. The Reinsurance subsidy is defined as a federal subsidy that covers 80 percent of allowable drug\ncosts above the out-of-pocket threshold, net of DIR. The out-of-pocket (OOP) threshold is reached when the\nbeneficiary accumulates a defined amount in TrOOP expenses in one coverage year ($4,350 for the 2009 benefit\nyear). TrOOP payments include all payments made on behalf of the beneficiary, or by specified third parties\n(including LICS payments.)\n\nRisk Corridor Payment \xe2\x80\x93 The first three types of subsidy payments (i.e., Direct, Low Income, and Reinsurance)\nare paid monthly by CMS and reconciled at year-end. The fourth type of payment, the Risk Corridor Payment, is\nonly paid to plan sponsors after the year-end reconciliation. This payment is also known as risk sharing, because\nit compares the payments made to plan sponsors throughout the year to the costs reported on PDEs that the\npayments are designed to cover. In this comparison, CMS uses the allowable cost (net of administrative cost) in\nboth the initial coverage period and the catastrophic phase of the benefit and subtracts from the total payments\nthe reinsurance subsidy that CMS pays. There is a target amount for the plan sponsor to reach, and any costs\nabove or below this target amount are shared with the government in predefined symmetrical risk corridors.\nTherefore, the Risk Corridor Reconciliation can be positive, negative, or zero depending on the risk corridor that\na plan sponsor falls in surrounding the target amount. The purpose of this payment is to limit a plan sponsor\xe2\x80\x99s\nexposure to unexpected expenses not already included in the reinsurance subsidy or accounted for in the risk\nadjustment factors. The determination of the risk corridor payment is discussed in more detail in the Year-End\nReconciliation section below.\n\nRisk Adjustment Factor \xe2\x80\x93 The RAF is a multiplier used when calculating direct subsidy payments to help predict\nthe costs of a beneficiary based on demographics, health status, and expected Medicare costs. Diagnosis data\nfrom Medicare Advantage Plans and Fee-for-Service (FFS) Plans is combined with beneficiaries\xe2\x80\x99 demographic\ndata from the Medicare Beneficiary Database (MBD) to calculate a RAF for each beneficiary. In addition to\nauditing the diagnosis data that drives the calculation of RAFs, CMS also validates the mathematical accuracy of\nthe RAF calculations by having a validation contractor recalculate RAFs to compare with the RAFs calculated by\nthe RAS contractor. After all validation and certification steps are performed, the RAF file is used to calculate\nthe direct subsidy payments paid to plan sponsors.\n\nMonthly Payment Validation \xe2\x80\x93 The CMS CPC validates that the monthly payments to each plan sponsor are\ncorrectly calculated by using two processes, the Plan Payment Validation (PPV) process and the Beneficiary\nPayment Validation (BPV) process. During the PPV process, CPC validates the common accounting numbers\n(CANs) used to code the payment transactions, validates that only active plans receive payments, and validates\nthe completeness of data transfer from the Medicare Advantage Prescription Drug System (MARx), which\ncalculates payments, to the Automated Plan Payment System (APPS) from which payments are executed. The\npurpose of the PPV validation process is to ensure that MARx correctly calculates the monthly plan payments at\nthe beneficiary level. CPC compares the demographic and risk attributes of beneficiary data in MARx to the risk-\nadjustment factors and the MBD. CPC recalculates payments for every beneficiary using the MARx Monthly\nMembership Report (MMR), and for a 3 percent sample, CPC recalculates payments using source data from\nMBD, HPMS, and RAF files. CPC also reviews payment adjustments by plan type.\n\n\n\n\n 20\n\n\x0cPrescription Drug Event Data\nA PDE record is created every time a Medicare Part D beneficiary (i.e., an individual enrolled in a qualified Part\nD plan) fills a prescription covered under Part D. The PDE record is a summary record of all the transactions that\noccurred surrounding the dispensing event. Specifically, the PDE record lists the drug costs above and below the\nOOP threshold, separates basic prescription drug coverage benefits from enhanced benefits and includes all\npayments made at the point of sale. The plan sponsor is responsible for creating the record, maintaining an audit\ntrail of PDE source data, and electronically submitting information to CMS.\nA PDE record consists of 39 data fields. PDE records contain actual costs incurred by beneficiaries at the point of\nsale. PDE records include separate payment fields to distinguish between payments made by plans and payments\nmade by beneficiaries or by others on behalf of beneficiaries. Both TrOOP-eligible and non-TrOOP-eligible\npayments are reported on PDE records. Plan sponsors are responsible for maintaining a beneficiary\xe2\x80\x99s TrOOP and\ndrug spend balances, which the plan sponsors use to determine when the beneficiary will enter the coverage gap\nor reinsurance phases of the Part D benefit. To facilitate the complete and accurate accumulation of TrOOP\nbalances, CMS has contracted with a third party to act as the TrOOP Facilitator. The TrOOP Facilitator sends\nplan sponsors data to inform plan sponsors of secondary payments on a Part D claim, so that when such\nsecondary payments are not TrOOP eligible, plan sponsors can reduce the amount of TrOOP accumulated for the\naffected claims. The TrOOP Facilitator also sends data to plan sponsors to facilitate the transfer of TrOOP and\ndrug spend balances between plan sponsors when a beneficiary changes his enrollment mid-year to a different\nplan sponsor.\nPlan sponsors submit PDE records to CMS through the Prescription Drug Front End System (PDFS), from which\nan automated process transfers PDE records to the DDPS for various edit checks. In addition to performing up-\nfront edit checks, the CPC conducts outlier analysis on PDE data in DDPS at the PDE and beneficiary level. CPC\nuses monthly reports produced by DDPS to identify significant outliers at the beneficiary level such as very high\nor negative financial fields. If an outlier is found, the Division of Payment Services (DPS) works with the Plan\nCompliance Officer to resolve any findings.\nOn a monthly basis, DDPS runs a Plan-to-Plan (P2P) Reconciliation process. A P2P Reconciliation is needed\nwhen one plan sponsor paid for Part D drugs in good faith on behalf of another plan sponsor because a\nbeneficiary\xe2\x80\x99s plan enrollment was not updated or accurate. Plan sponsors have 30 days after the effective date of\na beneficiary\xe2\x80\x99s new coverage, or 30 days after the date the new contract of record submits the enrollment to\nCMS, to submit P2P PDE data. The submitting plan sponsor will send the PDE data for the affected claims to\nPDFS. DDPS reassigns the PDE costs to the contract of record for final reconciliation. DDPS issues monthly\nreports to plan sponsors under the P2P processes. These reports include monthly receivables and payables for\nplan sponsors and the reconciliation payment. CPC validates these payments and a CMS contractor distributes\nthe reports to plan sponsors. The contract of record will then pay the submitting contractor.\nOnce DDPS has performed edit checks, the PDE records are forwarded to the Integrated Data Repository (IDR).\nThe IDR stores PDE records and accumulates summary data used in payment reconciliation. The IDR sums\nLICS amounts, gross drug costs above and below out-of-pocket threshold, and covered D plan-paid amounts.\nThis data feeds directly into the Payment Reconciliation System (PRS), which creates a record for each\nbeneficiary enrolled in the plan during the fiscal year and calculates reconciliation payments at the plan level.\nDirect and Indirect Remuneration\nDIR refers to discounts, rebates, and other price concessions from manufacturers or Pharmacy Benefit Managers\non drugs that lower the plan sponsor\xe2\x80\x99s net drug costs. In performing the year-end reconciliation, CMS calculates\na plan\xe2\x80\x99s allowable risk corridor costs by subtracting DIR received by plan sponsor. Plans report DIR to CMS\nonce per year before the year-end reconciliation. CMS performs an analysis of DIR data based on 13 assumptions\nin an attempt to validate the reasonableness of each plan\xe2\x80\x99s reported DIR.\n\n 21\n\n\x0cFinal Part D Plan Enrollment Data\nPart D plan sponsors must submit all complete enrollment requests to CMS, so the beneficiary can be recorded as\nan enrollee with the Part D plan sponsor. Effective in 2008, plan sponsors have seven calendar days to submit\nenrollment data to CMS after the complete enrollment request is received. Plan sponsors submit enrollment data\nto CMS through the MARx system. MARx accesses the MBD and the SSA\xe2\x80\x99s Master Beneficiary Record (MBR)\nsystem to confirm the status of beneficiaries. At the end of the fiscal year, a final update is made to plan\nenrollment. Plan sponsors are responsible for submitting updated enrollment information which may reflect\nchanges in enrollment dates, LIC subsidy status, retroactive changes, etc. CMS uses enrollment data to calculate\nthe final RAFs for the year. This information is used in the Risk Adjustment Reconciliation Process to calculate\nthe Direct Subsidy Reconciliation.\n\nYear-end Reconciliation\nPayment reconciliation begins with the Risk Adjustment Reconciliation. This process uses year-end RAFs to\nrecalculate the monthly prospective risk adjusted direct subsidy payments. These amounts are reconciled with the\nactual payments that were made to plan sponsors during the year. The Risk Adjustment Reconciliation process\ntakes place in MARx and these payments are issued separately from the LICS, reinsurance, and risk corridor\nreconciliations. The reconciliation of the LICS payments is straightforward, because there is a dollar-for-dollar\nreconciliation with what was paid to plan sponsors and what was submitted on PDE records. Plan sponsors are\neither billed or reimbursed based on reconciliation.\n\nThe Reinsurance Reconciliation is the next reconciliation processed. CMS compares the monthly prospective\nreinsurance payments made to the plan sponsor to the actual reinsurance subsidy due to the plan sponsor\naccording to costs reinsurer for Part D, covering 80 percent of covered Part D drugs above the out-of-pocket\nthreshold, net of administrative costs and DIR.\n\nThe final reconciliation calculated is the Risk Corridor Reconciliation. This payment is also known as risk\nsharing, because it compares the payments made to plan sponsors throughout the year, net of administrative\ncosts, to the costs reported on PDE\xe2\x80\x99s that the payments are designed to cover. There is a target amount for the\nplan sponsor to reach, and any costs above or below this target amount are shared with the government in\npredefined symmetrical risk corridors. Therefore, the Risk Corridor Reconciliation can be positive, negative, or\nzero depending on the risk corridor that a plan sponsor falls in surrounding the target amount. CMS calculates a\ntarget amount for each plan by totaling Direct Subsidy payments and monthly premiums paid to the plan and\ndiscounting the total payments by an administrative costs ratio. CMS then calculates the plan\xe2\x80\x99s allowable costs\nfrom the initial coverage phase of the benefit by totaling covered Part D drug costs recorded on PDE records and\nsubtracting both DIR and Part D drug costs from the reinsurance (i.e., catastrophic) phase of the benefit. CMS\nrefers to the resulting total as Adjusted Allowable Risk Corridor Costs (AARCC). For each plan, CMS compares\nthe AARCC to the target amount. When the AARCC is less than the target amount, the difference (i.e., excess\npayments) is retained by the plan as profit down to a certain risk corridor threshold, after which part of the\ndifference is refunded by the plan to CMS. When the AARCC exceeds the target amount, the difference (i.e.,\nexcess costs) is absorbed by the plan as a loss up to a certain risk corridor threshold, after which part of the\ndifference is reimbursed to the plan by CMS.\n\nThe reconciliation of the payment types discussed above is summarized in Figure 1 below. The figure shows the\ndata elements used to determine the final actual costs for each payment type and the data elements used to\ncalculate the total payments made to the plan sponsors through the year. The cost and payment data are compared\nto determine any amounts due or owed. The risk corridor payment is determined after the three subsidy payments\nare reconciled and the figure shows the relevant data elements that serve as inputs to risk corridor payment\ndetermination.\n\n\n 22\n\n\x0c Prospective Payment Payment Types Reconciliation Data\n Data Elements Elements\n\n\n \xef\x82\xb7 Plan Enrollment Low-Income Cost-\n Sharing Subsidy \xef\x82\xb7 LICS Reported on PDE\n \xef\x82\xb7 Estimated Qualifying Costs (LICS) Payment Records\n\n\n\n \xef\x82\xb7 Plan Enrollment\n \xef\x82\xb7 Risk Adjustment Factors (RAF) Direct Subsidy \xef\x82\xb7 Final RAF\n\n \xef\x82\xb7 Beneficiary Premiums\n Payment \xef\x82\xb7 Final Enrollment\n\n\n\n \xef\x82\xb7 Plan Enrollment Reinsurance Subsidy\n \xef\x82\xb7 GDCA and Total Drug Cost\n Payment\n \xef\x82\xb7 Estimated Qualifying Costs reported on PDE\n \xef\x82\xb7 DIR\n\n\n\n\n \xef\x82\xb7 CPP Amounts on PDE Records\n \xef\x82\xb7\n \xef\x82\xb7\n Reconciled Reinsurance Subsidy\n Reconciled Direct Subsidy Payments Payments\n \xef\x82\xb7 Total Beneficiary Premiums Risk Corridor \xef\x82\xb7 Direct and Indirect Remuneration\n \xef\x82\xb7 Administrative Costs Payment\n \xef\x82\xb7 Induced Utilization\n\n\n\n\nFigure 1 \xe2\x80\x93 Overview of prospective payment and reconciliation data elements\n\nAfter all of the payment reconciliation calculations have been performed, the PRS generates validation reports\nand the CPC reviews the reconciliations to validate results. Additionally, CPC independently validates inputs and\noutputs of PRS using the Reconciliation Input Report and Reconciliation Output Report. The Reconciliation\nInput Report shows annual plan sponsor input data for LICS and Reinsurance reconciliations. The Reconciliation\nResults Report shows all PRS inputs, calculations, and reconciliation results at the plan level and rolled up to the\ncontract and program levels. Once reconciliation data has been confirmed, it is transferred to the Automated Plan\nPayment System (APPS) for payment. All payments are validated and authorized by the Medicare Plan Payment\nGroup (MPPG).\n\n\n\n\n 23\n\n\x0cAPPENDIX B \xe2\x80\x93 ACRONYMS\nAdjusted Allowable Risk Corridor Costs AARCC\n\nCenter for Drug and Health Plan Choice CPC\n\nCenters for Medicare and Medicaid CMS\n\nCovered D Plan Paid Amount CPP\n\nDirect and Indirect Remuneration DIR\n\nDrug Data Processing System DDPS\n\nGross Drug Cost Above the Out-of-Pocket Threshold GDCA\n\nGross Drug Cost Below the Out-of-Pocket Threshold GDCB\n\nHealth Plan Management System HPMS\n\nKPMG LLP KPMG\n\nLow-Income Cost-Sharing Subsidy LICS\n\nLow-Income Subsidy LIS\n\nMedicare Advantage Prescription Drug System MARx\n\nMedicare Beneficiary Database MBD\n\nMedicare Enrollment Database EDB\n\nMedicare Modernization Act MMA\n\nObjective Attribute Recap Sheet OARS\n\nOffice of the Actuary OACT\n\nOffice of Financial Management OFM\n\nOffice of the Inspector General OIG\n\nOut of Pocket OOP\n\nPlan-to-Plan P2P\n\nPlan Payment Validation PPV\n\nPrescription Drug Event PDE\n\nRisk Adjustment Data Validation RADV\n\nRisk Adjustment Factor RAF\n\n\n 24\n\n\x0cRisk Adjustment System RAS\n\nSocial Security Administration SSA\n\nSupplemental Security Income SSI\n\nTrue-Out-of-Pocket TrOOP\n\n\n\n\n 25\n\n\x0cAPPENDIX C \xe2\x80\x93 MANAGEMENT RESPONSE\n\n\n\n\n\n 26\n\n\x0cl4\xc2\xad\n/-,\n DEPAJITM\xc2\xa3NT OF HtALTIl &. l!lf).!M; s:E~V\\C1iS 0 - . ", _ \' _ _\n\n\n .....1.1",.\'..\n -~-\n\n\n UA TF. \' I\\Ak 1 , 1111\n\n TO; \t [)onio! R. Lc,\'in"\'"\n\n\n ~?:b\'-\n A"\'~ AdUlin;SlBwr\n\n SlJRJt:(T, \t OfflU of lllSp\xc2\xablor Gm<:ral (oro) Dnoft R<JIOI1: -M\xc2\xablic.r< p"" D - Pres<riptioo\n Dru~ Ev.nt R_nciliiUion I\'roc<:s." (,\\\xc2\xb718-08\xc2\xb7)01 02)\n\n\n The Ccn\\en for Modic"", ill. Mcdicoid Ser.\'i=! (eMS) oppreci.1C> It.: 010\' , """ ";th "\'P""\n ., the Medic_ p"" D I\'l=:ription Dru& ~".,. (i\'OE) rec.x.dliaUoo proc.... 111< OIG. \'hro~\n ill OO"tr><lO< KPMG, LLP, , ,,ru\'ed .... Pan D 1>\')\'\'\'\'\'\'"\' \' ysIenl to .J.e<ormi". "\',<1...., eMS\n oontrol. """\'1\'0)\'........ \'" pi"" Iponsors, PDE _ . and )nr.. nd r<C<>noiliMion I"<" \'idcd\n ~. ,,,,,.bk ...unn\xc2\xab thoI :\n II The inJ\'UtS ,"" drive \'"" "kul.,ion o r """"hly pOym<nts . . 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"\'I!~C~~, . ~ ;r \t ~ " s\xc2\xb7\n s\xc2\xb7 0;\n "\n ~\xc2\xb7~ \xc2\xb7 i~~ ~ , " I\n o;ri~ ,,".\n ,\t -~~ \xe2\x80\xa2~a"~~\n ~ < - ,\n - ~~ ., ~. ~ I" , , \xe2\x80\xa29.\n - .]\'i\n ." ."\' "r" FI"; [ \t\n -, \t \xe2\x80\xa2" -\t- "\'Bi~"~\xc2\xb7\xc2\xb7\n "\'Bi~"~ ~ ~ ,";~.\n ,";~ . \t l~ \xe2\x80\xa2\n ,"g-g\xc2\xad\n ~ ;; ,e-\n ;;,e- 8\' a~H; \xe2\x80\xa2 .:I ~ o:~ _1 ~ ~ " ---- , ~\n ii: ~ -, \',j\n i , !\xe2\x80\xa2 ,,\n _ ls\n _ls ~ ,, ~~\'< ;; 2 0 ~ \t\n ~\t i\xc2\xadi-\n ~"\'3 tff<:[ \t ,~2 i\n p- !O,,\'~"iR!~\n \'"".J - ,\xe2\x80\xa2-\n ,-\n 2.1ii~ \' ;r ", ,,,-,,,1! i "-\n ., ~ ..\t \xc2\xa7 Hit~ . ,0\n d\t\n n "l""~ \xc2\xb7 \'-;;:;-~ r\n \' "l""~\xc2\xb7 ;; ~ ~,., c.. ~. ~ H \xe2\x80\xa2\n ~":t ~.\n ~ . -" \'S \t " ---- \xe2\x80\xa2"\n l~n~~ ~ ~ E ~ ~~ ~H- ~-~ \t >\n "-. ~""- . ,.. , i!!!.~. if~r~; 1\n u;~\n ::" , ~-~\n " ! ~\n gQ- \'Ii- \'D\n - - S R~ \t\n t \' ,\t ,\xe2\x80\xa2\xe2\x80\xa2 >\n "\';l~\' ~ .!!. i \xc2\xb7 :<, \xe2\x80\xa2 g \'" ~H".g \t i " 0\n ,n ~ l ,\n\xe2\x80\xa2\xe2\x80\xa2 \t ! ~. - ~{~()].~~ ~ ~ II.\n II . e,,, ~~ \t\n ~~\t\n ~i.~~~ ~_:::::~, e. ~ ~ . !!~:f!i\n ~. ~ ~\n \xe2\x80\xa2,\xe2\x80\xa2 \xe2\x80\xa2>\n h a. ~ ~ 1!\'!l~ iij" ~2. ~~3\'~ \xc2\xb7~\n \xc2\xb7~ \t "\n 0 \xe2\x80\xa2\n \xe2\x80\xa2\xe2\x80\xa2 ~~<_ 6~ \t p;;~..,~\n ;;~..,~ ,\n ,.\'~,, ~ ~\n ~fln\'h~U\'... \t\n h~ ~\n I\'=\'! ,,~c;\n -;r-~,~~&",;lifs ~\n lX\n l.!X,\' ~H~[3i~~~ jgS:~3- ~ ~.~ .\n - >-\t\n >- ?\n 1; njJ~: ~ ,,~~~i \xe2\x80\xa2\xe2\x80\xa2\n ~=~~~ . ,,~ \t\n ~~\n in ~\'-~\n - -.Q~~ -a""\n , ;;\' "\'"i"a.~ .\n .ii ~"\'"i"a.~. f"\n \xc2\xb7........ f"\t\n "\t\n ",I, \xe2\x80\xa2""f\n ~;;; [ s i~~ _~n ~. ~ ." g "s-\t\n s-\n ,- \xe2\x80\xa2~2....,e,!? ~,- . t\'Ji if c (0 ~\t\n ~ \t\n ~~\n " -1\xc2\xb0:.. ~,-.\n 5\' ~ &-,~~o ~ \xc2\xa7~\xc2\xb7 _ \t\n ,"\n \'"o.~ ~ - -=<[ ~o ~ ~ &. is j ~.~ .\n ~f:f=~ \xc2\xb7 \t\n ~f:f=~\xc2\xb7 s- ,,"\' 5\n ~ -;:oils- ~:t\'y~ .\n I\n ~~ \t :;)!"~ ~ ~ ,\xe2\x80\xa2\n ~ o~~ ~~~~j~~ \t ~ ~ ~ ~~z.~ , \xe2\x80\xa2\n \'" \t \xe2\x80\xa2\n\x0cD IS Hpp\',,""\n\nTho e~ls d"", _ \'\'\'\' \'\' UT\'\' illl \'hi> =<>mm<nd. ioo . IlP.\\IS;\' \'Il< . ),1<;01 \'M ;, u",d 10\n~, \'he <= 1" of \' \'\'\'\' t>i<! ""\'i<w Th< \' .." on.jority Qft>i<! ""\'i<w rro\xc2\xab"inll""\'" """, r.b \n\nor< 00,";<10 "f\'ll< \'J=m. Pulling ,hi, "",,,,,I ;" 0,1>< \' J."m 100"<\' \'f>< 00II1r,,1 fun"\'" \'W\'J\' \n\n!rom """,", 111< ~ \xc2\xb7otk " ""ing perf"""\'"". IIlu, limiting"" .If.",,,-......of \' \'\'\'\' "",tro l ..,d \n\n<W",.. n..--y oftl>< 1""\'"\'\'\'\' A> dis..-u=d in oor .-..poru;< \' 0 tho .,...,\'joo,\n ".X>ml...-.d>l"", \n\nO IS ".1",,,,,\xc2\xab1 "" 20 10 bid d<">l: ",,\';"w.o impro\'-\' "",,,,,Is b)\' f<q";\';ng "",,,."\'\'\'\'\'....i\'\'\'\' ""d \n\norrro,,,1 for ""<Y}\' ,"b-," ,\xc2\xb7i<w. 0"\'" "..I><n II..t , "b\' T<\'~- ;, TOOl \' <Oluim! for "I\'I\'f",-.1 of. \n\np>ni<ul..- bid, Thi, <nh.roc<m<n, "-" impl<m<nl\xc2\xabi in tl>< 2010 hi<! <los!; ",,;ow 1"",,,<00,\xe2\x80\xa2\xe2\x80\xa2",1 \n\neMS "\'!"XI> \'ho, it will en,,,,, ,... all >Ub-,,,;,w, Or< <OOlplel<iy <1<>=""",,,,,, \n\n\n\n\nTh, eMS funhcr ",,;<w it. "",;00. for -""j""jing P\'ll\'\'\'\'\'"\' \'0. or "".-",mng O""\'l"Jm<n\'" from \n\npi.., \'poll""" "f><n bid ,"(iiI> fir<! ,1\xc2\xbb,\n bid. ho", """"\n or OOli",iorn .h... ""ull<d in .",KI>bI< \n\nO"<""\'J ",<PO,. \n\n\nTh< C.\\IS d<= _ ronco" "i,h \'hi> ,.,",o.mnrnd. ioo, PI", \'f\'OO"1\'1\' ,"om o bid,.o e~ls prior \'"\n, pion In, e~ls ","i,,,\', .,><1. "\'\'\'\'n oppropIhoI<. n<goti.\xc2\xab ,,\xc2\xb7ith pi.. """""\'" \'Q CIl\'U\'< Ib...\nb"", 1Il\'< ,,01>0\' 0\'\'\'\'\' r<\' DIS inSlTU<Oiorn ..>d oil.. loK!. M< "",.,... bI<, Wh,t i, uh ;m...dy OWN\n\'0.. or from, pb" 1pOO..... aft" th, p"," )\'UI ,I.,.., dep....-..J\' ul"" tl.. pt." .J>OO>O<" <xp<n.r>e<\nd"\';ns til< ).. .... <-\'\'\'\'\'gr\'\'\' <"",,01 "\'" ""\'..,f.)u, """"" Ii.,ioo pro\xc2\xab" .pe<if",""I)\' b\xc2\xab>us< ~\nt<rog1\'iz\xc2\xabl til< """""iii",,,,, in"ol,\'<o\\ in til< pro,,,,,,~ i,.., bidding 1""""\'. CMS do<. "\'" ...., .\xe2\x80\xa2 ""\n. ..!-,orit;, to -""j\'\'\'\' pi.. \'I""\'M\'I"" bid 0""""" . 1\'-\')m,"\', 10 pw, \'por..\'".. or """di, ;Of)\'\n1"<111 ;""" roc< \xe2\x80\xa2 \\>\\d "\'" oo.."fI "",<",\xc2\xabI. In f ...~ . on." ,I>< loi<! ;, ~ .,>d ...<d to ",\' pi ...\nPfcm ;..." ond 1\'-\')1l"\'," I<,.-d.. . h<T\' ;, 00 k &>l,"horil}"o \'",;>< .h< """\'\'\'\'\'~ bid .,"",,\'" [or\n>Ill\' I\'"\'J"IS<, inclooding odj ...,ms plan P\').""\',... . h." ifCMS Iud "\'" \xe2\x80\xa2\xe2\x80\xa2" hori\' y \'0 odj..... \\>\\d\naft", tt .. >0.""",,\xc2\xab1,OO\'"g\'" coold ""u tt en \xe2\x80\xa2 \'-W\')\' ofwti ..""",-", """\xc2\xabfI""\'\'\'\'\'\' d,p<OO \'\'\'S ""\n"h<d,,-~ tll< OOff\'<.~ i"" of on <1."" in . bOd " \'0001 I",,,h in ",,,MlabI. onder\xc2\xb7 ... o,\'. tpa) """" ro.\n,I>< pl.n. For <x...,pl<. ""-""linK\' pi",,\', bioi ",\xe2\x80\xa2\xe2\x80\xa2M \' \xc2\xabt"in; """",~;,-, I ,\' d " n l!inK ,I>< premium\n",>1<,,11< r", D ",I"" m Ill\'" pl.n Ifill< bid i> ",i i<d " ,I>< rnd or. pi... J~"" \'h<n _II\np, <mi..." .... y "" ""i >< ~ throulll>oot Ih< pi"" ,~.,., Thj, m<_ ,ho, Ih< 1><11<1"1<;"\')\' ",,,,,101\nI""."" . bill from \'ll< pi.. ..,.,.....,. fo< ,I>< J ilT....."". in p\xc2\xabmiu",,- i fill, "",m"Im ~ . .. "" all"\n"" \'i,;"\'" A, OOI<d en KI\'MO\' , dr-afl "port_d,,,, \'u Part D \'EG""""""\'" "I.,ing\'" Pf,,,,,um\n". k"l.. i"", dlat\'gong "", pI.r.-. bOd ""\'" """ tho p""",;\'1 \'0 aft,,,, 1"\'""""" dlarg<d to . U 1\'",\nD """"r",i.,-i"". SU<"b _ ,moct..-c would I>< ""\'\'\'\'\'\'Y \'0 e~ ! S - Il03l, "fpromot;ng 0 ""nen, Ih.\n,,,,\\o!;,h<\'! ""nefi<i><)\' I"OO<>.1ioo.,>d ""\'\'\'\'\'\')\'. ond ~ ".Oil oy,\n\'I\'ll< ,talUt< pro,ide, , fi""",,-otI; for h,lI\'i diK",.anci", "",,,."\'" pi... \'pooso<S\' bids .nd """"\nshoold be "\xc2\xab:\xe2\x80\xa2\xe2\x80\xa2,,,""- i"duding \'1\'<"[,< "\'-luir<...." u 00 Ih< ,,",,\'" \' " "\'hkh Ih< (io>\'<mM,," and\nplan,I""""" ..."m. tis!. eMS II\xc2\xbb a<o"r.I<I), f"Uo...-\xc2\xabIIh, ="",i1,,.1oo "-~u"\'-""\'-".. in tl"\n"""\'<,\n\x0ctjPMG H.." mwm4!\'i\' m\n\nTho C~IS T_in: iDdi,-idual oct",;", \'0 "".,if)" ""\'iT iOO<p<fO<Irn\xc2\xab of \'Il< pi.. \'I"-""<\'< pOor to\n!\'<\'forminl\\ bid T<,\'iew, or bid ,00;",\n\n11" nlS \'gf\xc2\xab\' "\'i\'" KI\'.\\!O thal indi,-iduol "","....,. ,n"" b< "<l<p<-ru,n\' 0(111< j>I\'" "".....,..\nwl>.\'t1 eond\\>;1iD~ l>id T<,\'iow, ,.,d bid \xe2\x80\xa2 ..J i" to .void on ...~ ...I or l\'<"\',i,\'\xc2\xab1 l>i., """" ",,;,..-ing\nand ,uditin.i bi<lo., CMS rook thot it ;, oftl>o """"" impo!10n0< to \'\'\'\'\'\'\'\'\' thot ",rlili<!, of\nim""," 00 "\'" influmeo ,1>0 bid TO,i<" and l>id ou<IiI ~ " and CMS "" Ii",-\xc2\xab th" it> cum:tlt\nl\'fOC,dur.. foti&n\' i f~"\'8 and ad.lres.iin~ """n..\n ~ , of ;m.,."" with bid <hi; \xc2\xab"k\',," and I>d audit\noonlract<>r> "\'" ...md"", to <Iimi"". moti,~ fOf m..,ipulaling ,"\',.,,,\' _ .udi, ti Dd;ng., {-\'~ t S\n<""""tI}\' "\'" 11\\< roll"" i,,!; prooedcw<> for "",ntif)""S .. ><I ad.:!t<";,,S "",, !1"~. or int""\',\' "i1h\ni" l>i<I ""\'~ \xc2\xab,\'KW \xe2\x80\xa2 .-.1 bid .. -.lil""",,,.;f,,,,,,\n 1) \t Ui<h ront>CtOf m,," , u.mil . h" ofl"\'1"",;al <oofli.", of """r<>\'\n w ith iu proro<al for\n ..,,;ce, (,ndLJd,d in it> T"d..,icol rf\'<>!"\'UI\'<nt \'0 CMS\' oon"a<t;n~ d<partnk\'tlt _ 1I><\n Off",. or A< ~" i,i\'i"", _ Graot, M""\'f"""\'" (OAUM\xc2\xbb). Coollo\xe2\x80\xa2.,\' ......""atod ;"""\n .) any .""->Cia<"", \'"\' I>o<i""......."!I\'m\'\'\'\' "\';\'h \xe2\x80\xa2 Modic"" Ad,...,"!\\< .... I\'re;<ript,""\n Drui j>I... durin, \'"" 1"" 12 m001h\', ,..d b) on)" im-oh-""","\' in \'h, ~ioo of\'l><\n bid< ,,, toe "";",,,\xc2\xab1 Of oudit\xc2\xabl, Th" 1""1""-\'1 infonn""\'" ;, r<I.in<d and m\';"" i""d by\n OAGM ,\n\n 2) \t At 111< \';m" ,lut I>d ""\'." .. or t,;d ....t it, ..., "\';gn<d \' 0 """""-"\'00;,\n nls ""j.,h\n o<)(,fl i", i<kntifO<d "\' il<m ! .00,\'._ C\\IS\'OACT .1><1 .... to"\',.. . preliminary ""!l>""\'"\'\'\n Ii" (b" """iI) to "",h <\'On_, The 0<J1 "~ n\' \'\'\'\' r<pIy ,..h<1l><r or "\'" i, \\w. ""}\n j>OI<ntioi ""\'Il i", Qf im",<st "ith ,he pr<limin;ll)\' "" igJKl1<"" . 00 d.t.xo." on ,I><\n r<IlWf1, ..=""\',.,.., The rom"",,,,,\' r<>pon><s ar" """d to odju" ..,d flO. li\xc2\xab lh<\n ...;g""\'....... tI<>\xc2\xab""\')\', \'lh .. pro<<<< "\\0)\' require .. ,...-.1 ;""";00\', .. bido. on\'" I><\n ",...igo><d ..-.d><ld.,""\'" cooft i" ,heel.:< \'""" b< mad< dunng each ;\'\xc2\xab>., i"", ,\\ "",or.!\n of this ptoc<S8 i, ""\'Ul"\';n<d thtooSh <m. il NtreSj>O<od<",. 1><,,,..,, OACT ..,d the\n ""\'\'\'\'\'\'\'(\'\'\'\',\n J) \tThe CMS ob<o <hed" ..,d ,,,,,,<10. th< ",illJUl1<ll\' of",), bid, \'0 lh< """"""\'" in "\'hi""\n th, COO""""\'\' \' >8\n the \xc2\xab11;1\')-;08 ac\'u;ll)\' for . bid\n\n 4) \t If .. "\')\' ,io", duriolg th, ""\'im\' Of ""dit>. \xc2\xab:o<ill ... , is ;""o,i;;\xc2\xab1 b)\' C\\!S or II>< \n\n " " \' _ , CMS will "\'\'\'\'\'\';11>1 \'h" bid... .., """<;>-\'"y\n A \xc2\xab<ord ofthi, rro.;~;\' \n\n m,irnain<-d ,r,.ooglt <m.il \'\'Q1T\'\'\'I\'OO,",,,,,, t>..-.w\xc2\xabn CMS 1Il~ (he \'\'\'r\'\'r~~or \n\n\nWhil, (\'MS b< 1 ",,~. ,hal ;t> 0""\'\'\'\' 1\'fOC\'" as ootl""d oro,\'. assure,\' U,., ondi,\'i_1..."\'u...;<>\nmu" be "\'~\'" of \' l>< pi.., \'J\'OO"Of "hm .xond<>."\'ing bid """\'" .,OJ l>id audits, nl S "ill\n""",id\xc2\xab addUlg. d...,li<lOiw ""i"iren..... to It.>,\'.\n ondi"idUll a.."\'WIri", e"\'i!i-\' \'h< ir i<ld<~ .\nof II>< rl," \'1\'00""prior to !\'<\'forming hi~ ",,\'i<,,~ \'" l>id audit> in our f.."", ,,\'on..\n\x0ctjPMG H.., .mwrn4!\'i\' m\n\nTho C~IS r"",.al"o \xe2\x80\xa2 p<Cf ,,,-i,,,,, opp""""h [Of bid ..dn. "1>0,, " ",1\xc2\xab,;.", ofbid, .00;(, 01<\np<Tfoonc<i b,\' .., o<,u.n. 1form ,p, <lid oot p<rf""" ,1>0 bid ",,-;0,.. orid """um<n\' "\';, ",,<iit;"""\nq.... lit)\xc2\xb7 ""\'ITol in ito intornal <OIIITol """"""",mot;"".\n\nQISHpp... ... \xc2\xb7\n\nTho CMS """", _ ""\xe2\x80\xa2\xe2\x80\xa2 ",r" ilb th;, ""OO1lllmd.ion, Th~ f\xc2\xab<JOUl>cnw, ion """k! mI""" ,II<\noIlk"",,\',\' orid "" II>< <fr.".,,. orth, hid oudi" Th< bid oudi, ;, oot on <,..I".,i Oll of\'il< w",,",\n\xc2\xab>mpIOl<d b), "" bid <bk rov;\'w,,", dtoin&,il< bid <bk ""i,w. >.ltd OIS dox, oot "\'" \xe2\x80\xa2 fmcl ing\nfrom 1ft< bod ">.l,, \'0 ,,\'. hat. Ih< perf""""""" of. OOfIItac,,,,\n if> ,I>< bod .le,k ",,-i.w_ "~\nimpot\'W1t \'0 ""\'" tl... tl>o bid .OOi(\'; \xe2\x80\xa2\xe2\x80\xa2 al ..... <p\xc2\xabif"d .. p<rn of"" bod inJ.."....,deoll oft!><\n""\'\'\'\'\'\'.. oft!>< , .. lier b,d de\'" ""i",.\xe2\x80\xa2 "d ""\'. .... Ih< <COp<.. ,,,,,,id<,,~ _ ~h ",\n,II< "" -i",,, .ro .OOi" ".< diD\',,,,\'" C~IS ""\'" oot """j,kfit to \\><: \xe2\x80\xa2 ",."....ti"i"" for ,il< bid\n" udit to i&rn1if)\'.n M"O ,h" p\xc2\xbb-\xc2\xab<l ,ho bid d",,~ ""\'iow, Thj, .,.,.i\'ion ;, """""u,"o."d \'0 \'il<\n"",tro<tor"o " "\'" " ... of"" oOOit 1\'f<>C<tt.\n\n i"\nbt ad.:! i, Ooo. b\xc2\xab..... tho wott ,,"the bid oudit build< "I"\'" "\'" "pe.ko.,., 11>< bid d<,~ ""\'i.\xc2\xb7""\n..y f"", ili"\';,y of\'he bid .... uitor >l ith Ill, "-\'\'\'\'\'\' pt<";00.1,. ,olw<d in "\'" bid .k,~ "" ,;,,,\xc2\xad\n\xc2\xbb",rnoIl), om..",,,, ,110 e/f""i, = ~flh< .udit. Tho bid . udi, ;, " m<>r< i"-depth <,~ h ,"ion of\nth< bid .d>l;ve to ,1>0 bid "\',~ ""i<ll~ ,h.u j , p<rf<:>rm<d <..-1;\';, in th< l\'\'\'\'f _ ;, imrn<i<<l \\Q\nid.;,.ify ;,""" that tIlO}\' oot h.l\'< I>\xc2\xabn o""onn\' \'" ""*\xc2\xab1 \xe2\x80\xa2 dtoin;; II>< bid d<>k ",\'Lew.\nDIS f. d . th., j, i, of1l><""\'0>\' "\'J>O<Uol<. \\Q .... u\'" that <ooO\'iOl. of i"\'<re>\' do JlOI inll ..."".\nt!>< bod ""i"", IIkl bod "uu i, p""""\', .00 it hel;\',..,. tIu, it< <W\'rn>\' """",<lure. f", iden\' ifying\nand 1Uldr"\'"\'g ,,,,,,lim of i......... ,,-ill, bid desl< ""-i,,.- ""d bid "udi, """\',...,..... Or< ... a id""\nto <iimin\'f< \'"\'y """il\'O rot m.n\'"" I.. i" ",,-Lew >tid ....tit fondin&".\n\n\xe2\x80\xa2 ,,:J\'~\'G FI.~D1 S ( ; \' Coo,,,,I. 1\'0 I\':n,", .. \'!\'h. ,\\r<"tIrar:-\' an.d Co " \' ~ I <fffi \'" or rDt:\n. "d \'I\'1QU1\' ,\\ \xc2\xab ","ulll".." " """ I"\'p",,-<"..n\' ,\n\nP\'S H"r\' ...... \'2 "jndjn"j\nTho CMS \'KI"<\' in pm w;lh KPMG\', fondin &-\n\nTh\' eMS dm,top. _ i"\'pl,m,"\', .}.H",.b...,J <diu to P""\'\'-\'\'\'\' ..-.d dOI\xc2\xab,......". in ,I><\n<al,,,I..i,,,,, of pDE 1"\')"""" ond ,"" rodd< Ih>\'- .,-< ...<d in ,....., :~"-<:nd ,\xc2\xab"" ..., ih .. ;oo , ...-it os\nCo\'-ct<d D PI,n P.id Amoun, (CPP), (;1-",. DruB C"" Iklow "",--<>f\xc2\xb7""". ", ,l-,-"hoId (GOCB)\nond co-o.. l)ru&Co>, AboI"< "",.<>f._I.:<! ,I=ho ld (GJ)CA~ CMS.oou1d """,id<,interim\n\'\'\'P> ...d1 \xe2\x80\xa2 \xe2\x80\xa2. ,\\t!J",& f><ldo 10 "\'" PDE ,\xc2\xab001 lay"""" for ~lan, \'0 "\'port drug \'1"\'oo .. od tru<\n"",.of\'pod<! (TrOOP) ,. ,,,..,,.1.10< baillie<, on " ."\'). !\'DE r<oord, .00 lher<b)\' "\'\'\'I\'[\n pi..,\n\'pomol roport.d .,Ulm"\'.,,,, b.lar>.o.. .. the toa... for """oti,\', """arid p.o)""" ;;,kI .di,.\n(i,o.. cpr. GOCEJ. ..,d G[)CA~\n\x0cD IS Hpp\',, ""\n\n\n\n\nD<\'\'\'\'k!ving. OOI..!~ of!)rug Ihi. Proc...ing s )"""\'" ([}DJ \' s~ an anal),,, n..m.ru,m to ok",,,\n,to """","" I"lYlk\'" ...d00<\'field< f", \xe2\x80\xa2 ,ubuI ofl\'DE ~ bos<d "" (.\\IS\xc2\xb7 rec.k"Ia,;oo of\nCPP. GDCB. on<! GDCA [",(,h "no;! ;r><Ieprno;l<nt "",um,,\'\'-\'\'\'\' of TrOOP _no;! dru~ ,!\'<I"l\nIni"""". A> OIS ",fmc. \' he opcr>1ioo 0[,""" \xe2\x80\xa2 """\'<1;,"< <OI" roL " \xc2\xabMilo;! th<n ;I>Of<m<I\'"lIy\nin<<<os< \' Il< ,\'o lurn< of P!)E """",, """k " b.!<d ODd " I\' im",dy impl,,,,,,", ",al\xc2\xb7I;m<\n \xc2\xab><,\npr<"\'\'\'\'\'\'\';>< P-1)......... and r,eld ,,&,,_\n\n\nThe CMS 11"",,"]1)\' , ~, CMS <..,...&d i",h " id ..1 P!)E _lie, "",",,,i, in 2000 " id . 1", 1\xc2\xbb.,\n\xe2\x80\xa2 TrOOP bol\'\'\'e< ,-. 10601ioo " "o;!~.. O",I\':f"\'-"Y\' Tho rumorf priOOo)\' i. \'" fi uolizo = " 1,,, "rid\nfolio... lip willi 2009 ""\'1\'10)\'" pi .... ,.... h ;n,,,W,,,",,,, TrOOP !>al.an..-e> to , ,,,,,""""im\n\xc2\xab"..,,,,,,";., I><""fit._ O IS "\xe2\x82\xac1\'" th" Ib,,,,, iOOuI d b< an """ \' )~;\' to oM." """"""\'\'\' p.) m,n\'\nand "\'\'\' fo<I\'>; f ... . \' U""<I ofb<n<[",;"\';\'" _ PilE re<oro.\' !o.>s<d 00 C\\IS- re<. k ul:U"\'fl of\nCPP. GDCR on<! GDCA [1<1d:; . no;! ir><le j>md<lJt ..." um,,\'"\'\'\'\' of TrOOP .n" drug ,pcnol\n~-\n\n\nThe CMS .,,"\',,\' the f<asibil i1y of obtainin, >rid ",me po;m.of... ", d."ill the .....1<fmin"ioo of\nmonthly I")nl< " ~ to ",oJ,"" ",ar .... I_tun< , "\'id:U"", of rDE ""oro.. ..,01 \' 0 ..-.i<ip\'- \' )~ ....\n",,01 ""\'W"" ""\'\'\'- ;\': P~I(j """".....,.,... 1Iw the >Iud)\' f""... un tl>< I<."\'ni<. , an<l pfOgm1""\'- ;"\n"1\'<\' " "f ""\'I_tin\\<, j\'I<l,,,,_ot\',,uk dill. ooIl<cti"" .,01 d" , ,,,,i,,,, th, "PI"", ..\';t;". lim; ...t""".\n\xe2\x80\xa2 "" e<n,\xc2\xb7b..--n<fi" of <""on,ing "mOl". \'" <OO1 rol. "\'-\'" PD~ r<cord " , lidol i"" ... kilo cornid.-ri ng\n<"""nt. moot l)\' od!>ox. dau ,.. Iida,.", pr"".....--., The "udy >hoold com ",\xc2\xab \' 00 curr"nt P.vt D\nI"~ " ""\'il" """ ~ n....\xe2\x80\xa2 >rid ""s\xc2\xb7tcrm solmi<>ru, \'0 help op1imil. P.vt D progwn reoJ\xc2\xb7\nt;rn, """,itoti ng \' 00",,1. ;" \xe2\x80\xa2 ooot\xc2\xb7ill\xc2\xabt"." """,nor_\n\n\n\n111.: C~IS \'!lJ\'\xc2\xab\' with Ibi, ",comm"",,",ioo, CMS , .. ",--norm. >1ud)\' \'" r.--;"\'" the f,,,, ibil i!)-\'\nof "",,.ni lll! """ u,ing IXlint\xc2\xb7Qf-ulo """ in 111< ""\'<I111;""\'ioo <If ._hl,\xc2\xb7 p. )m< ..... to .-.:ondu..~\n. .... ,,,,1\xc2\xb7,;,,>< ,\xc2\xb7alMlot .", ofPD/\xc2\xb7: u<orW. _ l~ ",-.i<\'p"o Y\' .....-OO f"""S"\'n \'\'\'\'.., O IS " \';11\n"" \'"",\'"\'< ,""\'" ofth< b<nefo.. 000 I;m;touon., of obt.o;";"g """ ...mg j\'I<l;n\' "r..I, d:u. fOf\n1h<,.., 1"\'\'1\'\'\'"<\'- [)u., to l\'ot".;.llog.l and "I\'\'\', at"on\'\'\' \\;m;!>.l;"",. th, .........""\'" ~ ...., ,"" ,,\'jll he\nw!>."tOO- CMS ,on """ in !h", " ". in \xe2\x80\xa2 c"\'" d l"cc!i,-" """ ,imcl,. 01"""\'" !f"\'~ cia," c......" be\nobtoi n<d in ,uch \xe2\x80\xa2 m,,",\xe2\x80\xa2.,.. "oo),in& the OS< of\'I>< do" will bc<oo", \xe2\x80\xa2 0100< "\'<><.\n\x0cI\'ll!;< 7 _ [n.i,[ R. I..",;,,,,,,,\n\n\ntjPMG H.."mmw4!!!i\'\'\'i\n\nTh< CMS in,pl<m<.., \xe2\x80\xa2 r",mol O""",ight pr<:Igrom oj\' t""\n TrOOP ,\xc2\xb7", i["\'.,.. -.l <ooli""", \'0\n"\'or!< "\'M i...""... to <ne<><Or\'&< 111< sh ... in.: Q[ enroll\xc2\xab inform"",,, ,nd <"""K\\<r oo..inin&\nodd;\'i."...1 [XIint."r\xc2\xb7..k ,,,,,.....,i<>n ..ronmti", 10 .1I0w romp.viwn or,,,,, pi.. 8pQMOf on<!\nplwma.." .\xc2\xabpon\xc2\xabl ;"r<lf1l"""", .00 an<idf\'lle ..... "LO"!>.." or ""\'landing rUE ...cord>_\n\n\n\nTIl< C~[S f"I1i. II,\xc2\xb7 """""" v.-ilh Ille "-oomm<oo.1;on. Wo ogr\xc2\xab "\'illl Il-oe ""OOffifIlend.. i<>n r", .\nf"",,01 o,",,,igjlt proil\'\'\'\'\'\' oflh< Foc; li...", ..-.d \'&1"\xc2\xab iI """\'Id I:>< impkru<mod 10 emul< \xe2\x80\xa2\n\'\'\'\'\'IOin\xc2\xab! lew[ of high perform"",,<. C.\\lS ilio \'W\'\'\'\' th" it >bould ,,,,,,if,,,< to <IX""\'""I\\< ",I..."\nP"" \'iJer> of pt<..~iptioo dtl\'8 eo\'\'\'\'\'8\' to ,,,t,, into data ...... ing \'8J",m.,," with eMs. s...--b\n\' gr\'\'\'\'\'\'\'\'\'.\' "" j\' ..... !>!. (:~lS to 1"\',\'<1< mot"< <oo\'f\'l\'" inf.... ,..\'i"" on be""r",,.,.;.,\xc2\xb7 ",,,-,, .!rug\n",,\'<f"3" \' 0 Pm D spoo.\'\'\'\'\'\' f,..- e......,.-di_i"" ofb<nefil ""i"oi<> and \xc2\xab) tl>< TrOOP F""i[;I"o.\xc2\xad\nfor i<kntif"oIi<>n Q[!"\'i..\xc2\xb7of....J< d . ;m, \'"...O<1ioo, ,"""Ie""" ..[ to P." D;ooo;I for <r<"ioo Q[\nNx t"""\'"\'"""\'" CMS ,,"\'\'\'\'\' thot "\'""" "\'.." i..""... \'\'\'1\'1\'1,,,,,<))\\01 lO ~[<d"\' ...e <>tobli,~\nwtiqu< idmir.... (\' .e .. Rx BJ~ or Rx HI:\', I\'CN rombi.-..,;oo) fOf <Kh ><pM\'" p[,"llh<~ ",1\'. ,..\nd.",,, tha\' II< \'"ppl<"""".1 D\n lO 1\'... <ann\'" b< ~j;t;,\\gu"h<d froo" oil <>th,,.. A>. ",un. tho\nT!VOP F.dli,,,,,, -, \xc2\xab<\'ipt "f "\'""\')\'lOY" ,,,i,,,. inf"""-1l.i"" ",HI "", trar&ol\'" ;"\'lO tho<"\'\'\'"\'\'\'\nQ[ ..J<.! ;,i<>M i N. 1f"",,0<1;00,. \'p\xc2\xabif",. II), iftn< oddit;oo,1 ,loin" """",, "" .,_,1>\xc2\xab1 " \'on 1\'"" D\nixmf"i.nc.. \\\\\' hik,,~ <on """".....\'" ",n..~ )\'IO,~\'" 10 <>tobli,h ;000;1 <= ..,iquo i d.;,~;f",,,,. C~IS\nh.. PO ",""","ity\'o ,,-qui\xc2\xab other in-=- <10 "\'.\n\nTh, DIS "","i"",. 10 ,,-0<1; ",ah the T!VOP lad[;t" \'" "" U1h< ind...,\'Y to ,tI<\'OOt"Og.\nimpro,\',m,\'" oflh< r-.:x \'......ac~ioo JX\'<>L..... Unt;[ PfOC"" ;"\'"""yen_ .... in pb\xc2\xab _C~I S do\xc2\xab\nno! .gr\xc2\xab th.. N. ,,,,,,,oct;"\'"\n >lK>u1d "" rompon;d to "\'1""1<01 PDE d"" or "\'-<\'I fo< ..\'imolin&\nIII< n,""b<, Q[ ""\'","odin.: pm;..\n\n\n\nTh, C~IS imp"\'\'\'\'\'\'\'\'\'\' \xe2\x80\xa2 <""ttol 10 ,,,<:>ni,Of Ih< w\xc2\xab lJ ~ "P"\'ltdo rroo" Ih< SS!\\ of SSt <[igibol ity\n0\\01. \'0 <kI\xc2\xabt and <""".1 .,,~ orron thot "."..;" m......1 inl<r>=ti<>n ", "" , <,.,hod,\n\n("_,[S I\xc2\xab.p\'"\'\'\'\'\n\'Th\' C~IS asr\xc2\xab\' IhoI ,1>< """\'",.,"\'S\n of,,\xc2\xabl.Iy oUt. lrom _ ...1S,ruMty Admuti,tr>1ioo (SSA)\nof S~l<m<tlW Se<uri\' ~\' In<""" (SS[) <ligib,lay f,\'" .. .....-.,....-y iter to d<I<ct :ool<l ",,,,I,,\n""""- Whil< not \xe2\x80\xa2 r""".li<.\xc2\xablpr<:>\xc2\xab>, \xe2\x80\xa2 \xe2\x80\xa2 <Joily r<pQr1 ;,; I\'\xc2\xab"\'i<!<d to.! """\' . in\' ,b< numl><f Q[\nr=>r<k fCo<;,-\xc2\xabI f,001 SSA. On. "\'1"""\'11< trod,. CMS "",-"<i,,,,.\n r<pQr1 Q[,II< "\'\'\'\'\' ,h.. "<0"<\ng.."TIrnoo<d in ",,,,,,""ioo "\'M r>r\'X"\'"in& Ih< SSA iiI<. In oJdil;"\', 10 Ih< I<gull.r r<;>min&. CMS\nm,<\\, ..guW1y with 5SA lO addf<" . )\'\'\'\'m fi,.. >nd <tro<I gene .... al by the.. f,I... 11,." hay.\nIo\xc2\xabn .",,,,i,.. ok....."" of error f,1e> in odili1joo \'0. "um"", of >oftw.... f!X<, impl ........ "\'d in\nord<r to hay. more <l1\'.<;\'\'\'t I""""uing of the fik .~<hang<. belw,,,,, ..... two .S""\'\'\'\'- This\n""~ ;, oo~in&;ooo;I ,,;11 """,in.....\n \\oog ., t"\'\'\'\' ;, \xe2\x80\xa2 ",,\xc2\xabI lO ,.,..."\', t~;,; "\'\'\'\'\'\' AI\np,=n\' ,I>oe"", ""<;,; k " ,h, n 1 """,rnl.\n\x0c " J>~ I G FII\'IlI.\' -G, C.\\I S S~ ...1d Enh.n.. Cnn\' n;H Tn ~ . , u .. C"",pl<1<n",, ond\n.\\0\'..,."..., ..H H II P..... ,,, 11. ..... <;)1..;""_\nr" I ~ a.\' p."" to t\'lnd ln.;\nTh. DIS .gre.., in plrt\n\nJ:iniG IIt""mmmdotj""\nTIt< C~IS <",. N;\')\' """d.m""".OO 1Il<1ri", \'0 f>c ilit", IlIR Anol".,i, .1 til< indi"idu.1 drug\n ,,,,,,,,,,,nrn<I\n1<.-<1 ond rornpari \xe2\x80\xa2\xe2\x80\xa2)." l><f>,>o<" [>I..., \'" til< droll 10\'0\'01. 11\'0 01", I"" p l.,., I><\n""",;,-."t \'0 "lru<-up" "pMed...,uaI <"im."d 1)]1/. >mOUll" .,IUI octual ...",..... b}\' p.... .. ><I\ndrug \'0 011 0\\0\' \xe2\x80\xa2 1><11" b.. is f", """<ling ...""qL..... \' ""ar\'<fl)" ond ."",,,,1 ,"blll"\'ions_ Ill>< \'0\nlh< .,, "\'" of I)I R ,,,,,,,,,;og, eMS m.)" I>< 1... ",\xc2\xab1\n in <lrm;"g d ~ect """,I",ion. from IllR\n....l )~;., oow<\'\'<I\', ,II< =,,""\nOf "\'00 own i"" oct i , \' ~ i<> ,\n "",iJ l>< uwl h)" C ~IS ..\' \xe2\x80\xa2 rnk f""\'" in ,<I\xc2\xab1i"8 pl.", fo, ..-l it\n\n\n\n\nTIt< C~IS ogre\'" " \'ith lh.. """"" "\'-\'tldat.OO .. I<l "ill ",,,,id\xc2\xab "\'\'l"iting Plio" D \'f>\'HI""" 10\n, uhmi! ",,-;..,.! DIR R,I""\'-\' " \'ilh lh<ir ...~u.oII)IR ..."","" ro.-. "n><-up" . "oh ,;\' , PI<,.,. ""\',\n!hat eMS ,,,,,,,,,Uy """ til< """ I" oflh, DIR ",""""""Ie..",, "";""" ., . id in ><1\xc2\xab1 ing pi""\nfor ond;\'. In f<>pon.e "" KPMO\', f<OO(IIfJl<ndlIii"" 10.. eMS 0011\xc2\xab1 \'Il< DrR M ... \'Il<\nindl,-idH.1 .wg Ic ,~ l r.:MS not.. lhat to oon.locI. ran I) ?O)\'I".,.\' ,.."...",11""",- " "\' ooly\nno\xc2\xab1.UI)\' ,,, <0>11\xc2\xab1 IllR Wi... !II< pi"" ",\',I. R<b". do.. IS .\'<ItI,od<t<d proprielat)- by the\n;00""1\')-\'_I""" I11..-1y .. \' \'\'"\' in<li"Olual drug lewl "l><t, th" r<bal< 1.,,\'. 1 ran \'" de"""in<d [\'" 0\n"""if\'" drug. It i, "n<l<or "h<IIl" i \' i, n"""".,), to 00110" .00 ",.I)~, DlR dOl"" !hi, lov.,[ \'Q\n,",un; Ih.t it i. I,,,\xe2\x80\xa2\xe2\x80\xa2\xe2\x80\xa2,,..N< ,.,d "oo,p\\.."1<, F..-J"\'rTnOr<, ""obli>hing b<;""hmosb .-I """ro,, \xe2\x80\xa2\nIh, iod i,-jduol .wI k,-d ""y \'"" Il< <ft,.,..,i,.... l i\'-"n til< 1"\'11< ,\'..-;. oilit" in til< 1",-,,1of rro.l<,\np",,-id<d b)" ph.,,,,,,,< ... ,,,] m...w""u",,, \'0 dlif,,,,,,, spoo"\'"\n\n\n\nTIt< eMS ".,[>1"", t\'"\n I"""ih ilily ofr,,-~;\'-inl """h.- """f1rnl>1io,", from m. n"f"""\'\'\'\'\'\'\' . 00\nPIwm><},lkn<fn .I h,ug"", (PB~h ) 00 D IR "",,--n<kd 10 pi"", \'" pi"n\' "\'lI",izOIion<. This\nm.)" ,<doc.\n til< .... Hal .00; 1 hurden 0<1 I\'m " and fll..--il",,< 11>< ">Or< ",,j\xc2\xb7lim< moollOring of\nDIR dW.\n\n\n\n\nTIt< eMS do<. \'"" >.gT\xc2\xab " \'ith thi , """,,~ation , M."y"""""", <llIT<nl ly , ohmil DrR\n"\'\'\'\'\'\'\'\' th.it Im-, "\'\'\'\' !",-PM\xc2\xab! by lh,ir I\'ml " 111<,<1""",_ "\' "\'8 inf"""",oo colloct\xc2\xabi d~""l y\nfrom pm!> to ,->lidal< It!< DlR "\'I""" "wid he lim"\'" in ," <1I\xc2\xab1i.-.\'",,,. , 1\'\'\'\'\'\'\',,,,,,,,,,_;, ;,\n~"" .\'loo.bI < "i><th<, D IS tw ..,. .uthority to """,Ire pb.... n:o:<"tiral m""w.."1"""" \'0 , "bnIit\n",book dolO !Ii\'-"n th .. P..-I n "",",>". ""\n w ith r,n I) \'\'\'\'\'\'\'\'\'\'\'\'\' ond _ pl.""""""",;.;,,,\n\x0cPog< 9 _ [n."[ R. I..",;,,,,,,,\n\n\n.,.."""f..... ut<!S.\n S""" > r<qU;",n","- n..)\' ,\xc2\xb7k.hllo th< noo\xc2\xb7int<rf""""" pro"\'\'\'\'\'\' or..,. Soc,al\nS\xc2\xab""" Y A ...... SM;OO 1S601J.- I l(h~;).\n\n\n\nTh, CMS """Ie,.,. \xe2\x80\xa2 ~ .oo;", of plan \'I""\'...... ])]R "\'port,,,& .00" > lars,", ..1<"",,, of pl.,,,\n ror\n])]11- and "",0<1,0<1 """\'f"\'<h<..."" ])[R .<Hli", by """"",hoS plM< \'\'J\'OfIS<\'\' D[R re.-.:.rds ,,\xc2\xb7ith II-.\n"frll\\I,_ CMS should. " ,"\'\'\'\' "<ed,d. coonl,,"o ""d ,,(If\\; w,th II", OIG 10 11,8" >udi,\n \'"\n.... i,, ~ i C> -.l <,.,,,,,,,.<~.,,, PB.\\I ~ ,\n\n\n\n\n1b< C~IS \'8\'\'\'\'\'\' "\'\n part .nd <I;"gr\'." ,0 pm. With rnp<d ,,, . iliIi\'Ulg > [ars,,,.I<"\',,,, of\np[..... CMS >8>\'-"\' _ 0.." to bOOg<\' """ttai.... in th< I""". eMS faced nwt\'ld\'()W <hall<"g\xc2\xab \'\'\'-\'I\n<OUSN "" " ), in ~...in:g \'Il< \'UVl".1 a"di", or,h< fm"""i,1 r=:>rd. or O<\\C\',hi ,d of III< Pon D\nspoow<> oIT<rin&P,n D drog pl.,." Howe,\xc2\xb7\xc2\xab, eMS i> <""""... ".1 \'" i""",as< ... J it <ffkirncy\n.... cfJ<<1i\'-<n= b), r<,.,..-.;hing and in lrkm\'n1in ~ (if d"crrnir>N \'r>Ilf\'OPri"<) "\'\'\'\' itk", and\n>f\'I"\'>\'><""" Wi.., "\'pM \'" ""o<Ie",in g .<>:l \'ts. ;, i. """" .ff\xc2\xab1\'w \' " .<>:li, pi... \'1""\'00<> afI<r\nt",a[ \'""oo<iloa\' "" . ~f. p["" year. "hi<h doe,; "\'" ",-\'<Ow """t final P[)f.s. lJIR . .,.:1 T!OOP\nbalanc", Or< , """.;\'"d. "h"h 010\xc2\xab "or occur .."i [ "",m" )\' thrOOgh tho >~>r f,,1I0lO\',08 ,"" pt.n\n)\'0.... To .,,,,,,1<.-.,,\n -.l it, .... oo],J <\'-< ...Ji" \'" Ix tw.oo.I in ,,"-f,.,.];,\xc2\xab,1 data, Wi,h """""\'~\n""""1<ilin\xc2\xa3 DIR "\'~ with PB\\h. UIS di,~<"" with lhi, """",,,,,,n,:I., ioo. M",)\' "I\'OflO\'Jf\'\noum;!ltl ), , ut>rnit DIR ,<pon, ,hat 110,," ""<n pr\'"f\'u<d by 1h<i, PB~ I , . Th<r<foo:, ",ing\n",f",m""", 0011.,.... ,\'<1 di........ [),!"roo, pml. \'" ,-.Iidat< ,he DIR 1"<"pOI"l\' "\'oold b< lim;t<d in its\n<fl,";,\'<o..... <-\'MS \'8"\'\'\'\'\' ,t\n that ilioolol "be...., ... <!od_",oro".." ..-.d \\",n >l i,h til< O[G \'0\n,[;8\'1 ""d" ... iyjti".. bLOt i, 00.. n\'" >go-\xc2\xab ,h.. " <on ,,,....., l><\'Ceo< \'" pml .... ord.\n\n\xe2\x80\xa2 KP.\' [(i .\' 1.\'])1 :-;( ;, C .\\IS Sbould (;~ ,"\'"" .\\I."... r[aI\' S pon..,c ,1""[, r"O\xc2\xab\'du ....\nl\'b ...... ~hout th. lI..nent \'\xc2\xb7"" c.\n\npIS H"........ \'" t1gd ln., \n\n\neMS ogr\xc2\xab. in part,\n\n\n\n\n\'Th. C~IS\' n"",f", Drug"" Il<.[,h [\'I", eOOiL. (CPC). OtT...... of I\'inandal Maru.S..".."t\n(on[). ..., O,\\<-\'T j,,;",I ~ <o,h""", \'Il< P.... D ""\'LIf""\'" "\'"\n Nmpl\'_\' program. 11\'0< progrom\n<\'" ,""",i>l or C~!S .<Hli" ."d ~II)" .....i\' ooI ..",nio", I""\'-itkd by plan "f\'OO""" "",h\n.. SAS 7O<\xc2\xbbmin.. ."".\n\nC.\'[ S H"po"",\n\n1b< nls >g\xc2\xab<\' " .,,,, th" ",,,,,,""<nda!,,,,,\n Witit. th< rimu,s , 1\',""\n OFM f,,,,,,dol ,,",lit< ;,\n"""",,,"i),\n ,~~d. Ih< 1"<"pOI"l foikJ \'0 n1<.... .,., th.. II>< fm ,,,,.-i.1 ..... ;t, in<Iudo: \xe2\x80\xa2 ,<"k,,\' of\nPD&., DrR....u To<XlP ....d in 11K ,\xc2\xab"""iii.,,,,,, , Th< ,<""",iii.,;", ",,,,iI)" """"" 6 moolh,\n\x0caft\xc2\xab Ih< 1>......1;1 Y"\'" S;",,,, pi ......, oItow,d 10 m:ok< ,\'.no..: 00""\'\'\'\'\';\'\'\'\'\'\'\'0 POE, throughout\nU", bencf. )\'\'\',, _OFM .pe\xc2\xabf><.lIy petfot\'..", 1/" li """,,;01 .ooi" oil" (II< )Ut.,nd \xc2\xab\xc2\xabIoILili,,;""\nThi> ""..m,\' \xe2\x80\xa2 ...,pk of (I>< n",1 POE. ,,,",<I in (ioc ".." """ili.. "", i> ....J i"d. All fin_i.1 .. !<Ii(\n"",,110 ore ~ with O.~CT . oo cl\'e A, m<mi"""d in (0. ",port. C~ IS h.. \'h< . .. Oority \'0\n,,~ """"""ili"ioo re< p:>d "\'"..... Th;, outIK><i\'y <QUid hc <x<ru,od \'0 m,]v, odj","",,,"\nba\xc2\xabd 00 Ih< "",,118 of to. I;.."d .. _\'IS.\n11" nlS ,,-;11 "\'\'\'\'"".. to ;"\'\'\'\'\'\'\'\'\' _it ,ff",;"",),.oo .~f""til\'<"" h)\' """""\'\'\'\'"S IIoId\nimpi<mrolmil (if d..-..<m1in\xc2\xabl "I\'1""I"i\xc2\xbb<) AeW id<.. .00 \'l\'proo<ioc> \'\'\'\'\'\' ~, too.c "\'\'\'\'\'\'nm<.....-J\n1\xc2\xbb--I\':PMG \'0 i",,~ , <k <\'I"oo...d <,rr.pol.tioo or ,,,di, """ I" .,>.! <,)",panm<,,,,lizW .odit\xe2\x80\xa2.\n\n\n111< eMS " in>tat, Ri.t Adj"\'("""\'( I)"" \\\'.hd"\';OO (RAlJ\\\') "\'-\'<liu f"" rat! 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